Apparel exporters in Tiruppur and Noida have decided to shut their manufacturing units for 10-15 days a month to reduce operational costs amid a shortage of overseas orders, said executives. However, the apparel exporting units have not decided to lay off any workers yet, they said.
About 80% units in Noida have a month’s orders in hand, while in Tiruppur, orders have fallen 40-50% compared to the previous year. Tiruppur’s exporters said global brands have not placed any major orders for this year’s Christmas season.
“We are now waiting for spring-summer orders for next year which are placed in September,” said Raja Shanmugam, owner of knitwear firm Warsaw International.
The slowdown in key markets such as the US and European Union has hit knitwear exports from the Tiruppur cluster, Asia’s largest textiles export hub, which accounts for more than half of India’s knitwear exports. There are 30,000 units in the Tiruppur cluster, including ancillary units too.
“The units are going in for temporary shutdown for 10-15 days a month as the order position is not good. This will help the units keep a check on operational costs even though the profit margins will be impacted. The situation is likely to improve in September when global orders may start coming in,” said Shanmugam, also a former president of Tiruppur Exporters Association.
As per provisional figures, knitwear exports from Tiruppur increased 2.5% year-on-year to ₹34,350 crore in 2022-23. The growth rate was not only lower than the historical trend, except during the pandemic, but also lower than the country’s overall knitwear export growth of 3.76%. “It will be lesser in 2023-24 compared to 2022-23,” said Shanmugam.
In the Noida apparel export cluster, nearly 70% units have just a month’s orders in hand. “Only the big units have good orders in hand but the medium and smaller units are suffering from very few orders. These units are working at 30-40% capacity,” said Lalit Thukral, president of Noida Apparel Export Cluster, which houses 3,000 units and exports readymade garments worth ₹30,000 crore.
The paucity of orders notwithstanding, the apparel exporting units in Tiruppur and Noida have not yet decided to retrench any workers. “It will not be easy for us to find skilled workers when the order situation improves. Already we have seen a large exodus of migrant workers during Covid-19,” said Thukral.