Higher raw material prices, freight charges and labour shortages impact textile and garment units across Tamil Nadu

Textile and garment manufacturers in Tamil Nadu are witnessing rising production costs following the impact of the US-Israel-Iran war on raw material supply and demand conditions. Industry representatives said increasing prices of polyester fibre, dyes, chemicals, LPG, freight and yarn are affecting operations across spinning, processing and garment sectors.

The textile industry in Tamil Nadu is facing higher production costs and operational challenges due to the impact of the US-Israel-Iran war on demand and raw material availability, according to industry sources.

For spinning mills using manmade fibre, polyester remains the primary raw material. Industry representatives stated that disruptions in oil production and transportation from West Asian countries have resulted in rising polyester fibre prices.

Tamil Nadu has around 24 million spindles, of which approximately 21 million are currently operational. Textile mills in the State are operating at nearly 80% capacity. Industry sources noted that many mills had shifted towards manmade fibre in recent years because of higher cotton prices.

In the textile processing sector, LPG is widely used for drying fabric, and its prices have reportedly doubled in the past few months. Prices of dyes and chemicals have also increased by 30% to 40%.

“Many dyeing units have suspended operation as it is not viable to operate at such high costs,” said an official at the Dyers Association of Tiruppur.

Garment manufacturers are also facing rising expenses. Industry exporters stated that production costs in the garment sector have increased by 10% - 21% since the beginning of March.

“Since the pandemic, the purchase trend of the developed country consumers has changed. High-end brands have taken a hit and low cost retailers are growing. Some of the brands have skipped a fashion season this year because of the war. The demand is more for low cost garments. Cost of air and sea freights has seen three fold increase. Price of yarn is on the rise. All these have hit the MSMEs,” said a garment exporter in Tiruppur.

Industry representatives also highlighted labour shortages in the region.

“Workers are unwilling to come to Tiruppur because there is shortage of LPG for cooking. The industry is facing severe labour shortage too,” added another exporter.

Tamil Nadu accounts for a significant share of India’s textile and garment production. Industry sources stated that recurring operational challenges and rising costs are affecting MSMEs and creating uncertainty for the sector’s growth in the State.