Increasing Raw Material Costs Hitting Tirupur Garment MSMEs

MSMEs in garment manufacturing are largely dependent on export-driven business activities and they are labour-intensive and vulnerable to several external factors. The government should step in to bring stability to raw material prices, said the President of Tirupur Exporters’ Association (TEA) Raja M. Shanmugham.

“There is a continuous spike in cotton yarn prices. Even if I have ordered, I am unable to service those orders for want of funds,” he added.

According to Raja, garment exports from Tirupur this fiscal are expected to be almost Rs 32,000 crore as against Rs 24,000 crore last financial year.

Textile and clothing exports from the country between April and December 2021 were up 18 % in dollar terms and almost 25 % in rupee terms compared to the corresponding period in 2019, according to the data available.

While the total textile and apparel exports in April - December 2019 grew from Rs 1,77,803 crore to Rs 2,21,528 crore. While cotton yarn, fabric, and made-ups saw more than 40 % growth in the dollar and rupee terms, ready-made garments grew only 2.69 % in rupee terms (between April and December 2021 compared to the same period in 2019) and saw a negative growth of 2.81 % in dollar terms.

Overall textile and clothing exports are expected to be a little more than USD 40 billion this financial year (2021-2022) compared against the target of USD 44 billion.

Many garments units, especially those located in Tamil Nadu, Karnataka, the national capital region, and Punjab remained shut between April and June in 2021 because of the spread of COVID-19.

“We have seen growth in exports in terms of value and quantity, especially during the last three months,” said A. Sakthivel, President of the Federation of Indian Export Organisations (FIEO).