The garment industry is continuously raising voices on the high cost of cotton yarn and fabrics, saying rising prices are impacting exporters.
The leading apparel trade body of Noida, The Noida Apparel Export Cluster (NAEC),has sought immediate intervention of the Government in this regard.
Lalit Thukral, President, NAEC, suggested control in cotton exports, removal of 10 per cent cotton import duty and development of a mechanism to regulate the prices of cotton and other raw materials to support the sector.
He said that the garment industry is facing severe problem of the high cost of cotton yarn and fabrics. In the last few months, the cotton prices have been hiked up to 80 per cent. In garment manufacturing, 75 per cent of the raw material used is cotton.
“The unexpected steep price rise of the cotton posed a great challenge to the apparel manufacturers and exporters as it is hurting the production cost, which has been increased many folds,” he said.
Vimal Shah, President, Garment Exporters Association of Rajasthan (GEAR) said that it has become impossible to absorb the increase of 40-50 per cent in fabric prices and remain competitive.
He said, “Exports of yarn should not be at the cost of garments. In the garment industry, lakhs of people are employed. If the garment industry suffers, the revenues from yarn cannot compensate for the loss as it has limited value addition.”
In Tirupur, garment exporters have already organised strikes to attract the Government on this issue.
It is also pertinent to mention here that high material of raw material is one of the main reasons that garment exporters are losing orders and facing tough competition in the global export market. At the same time, they are also losing the confidence of the importers and the buying houses.
This creates more challenges for small- and medium-level exporters as they also face capital and liquidity crunch. There are many more challenges for them due to Covid-related disruptions.