Although the garment industry has witnessed a remarkable rebound in exports since the wake of covid-19, there are bigger challenges staring the sector in the form of supply chain constraints.
While hike in fuel prices remains a concern as the dyeing and processing units have started added ad-hoc ‘fuel surcharge’, the inherent supply chain constraints come to fore during buoyancy.
“India is one of the largest producers of cotton and houses the entire value chain up to apparel for export. But due to structural bottlenecks of the supply chain, we could seldom exploit the surge in demand” says Dr. Animesh Saxena- Manging Director Neetee Apparels- a leading garment exporter and President of Federation of Indian Micro and Small & Medium Enterprises (FISME).
“The sub-optimal size of dyeing & processing units and their limited capacities mean they can’t work on long term contacts and are prone to hike prices with even slight change in raw material costs. Secondly, the current size of processing industry can’t handle sudden surge in orders and export opportunities like the one coming to India’s way due to shift in GVCs, are likely to be missed”, he added.
Dr. Saxena has suggested to the Government to help bolster investment in the supply chain to augment productive capacities.
Speaking exclusively with KNN on this issue, Raja Shanmugham, President, Tiruppur Exporters Association stated, “The current situation is adversely impacting the industry in all forms. Government needs to understand that MSMEs are facing the brunt of the crunch in the supply of raw materials.”
He further added that, this turmoil has been building up since the last 2 years and to sustain is a big challenge for us.
Looking at the current scenario, growth doesn’t look immediate for the textile industry but a flow of investments will give the much needed push to the supply chain.
Shanmugham said that, “The PIL scheme, Pradhan Mantri Mega Integrated Textile Region and Apparel (PM Mitra) scheme are good for the corporate sector, and not for clusters like ours. Hence, our plea to the government is to look into liquidity block and release the amount guaranteed in the schemes.”
With this the Government also needs to aid the textile sector with technological advancement, and should come forward to safeguard the MSMEs.
It is imperative to note that India is the 6th largest exporter of textiles and apparel in the world, and is the 2nd largest employer in the country providing direct employment to 45 million people and 100 million people in allied industries.
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