Tirupur emerges knitwear capital

 

The Tirupur knitwear cluster is growing by 15-20 per cent every year. The hosiery town which began with a production of a few crore worth garments three decades ago has pitch-forked into a major hub, grossing an annual turnover Rs 27,000 crore for both in domestic and export markets. According to a recent study by the Sripuram Trust, Tirupur has about 800 garment manufacturing and exporting firms and 1,200 merchant exporters. Of them, 300 garment manufacturing firms are producing garment for domestic market. 

 

Tirupur is home to about 1,800 job-working garment manufacturing units, 425 dyeing units, about 3,085 supporting units including for finishing, embellishment, compacting and raising units. Tirupur textile industry employs about five lakh workers directly.

 

Raja M. Shanmugam, State Council Member of Confederation of Indian Industry (CII) says,  “The export sector regained its market in 2011-12 by reaching the turnover of around Rs 12,000 crore after global slowdown since 2008. Within three years, the export doubled and reached nearly Rs 20,000 crore now. The industry is an ever-growing sector, as a majority of people accustomed with the readymade garments in India as well as across the globe. The T-shirt has been accepted as office wear for workplace in western countries.”

 

The favourable yarn price, market demand and foreign currency values are adding to advantage Tirupur. Now, the Tirupur hub has set the target of reaching Rs 1 lakh crore turnover in 2020 as per the vision of the Prime Minister Narendra Modi.  But it will happen only if the highway to faster growth is laid, say exporters.

 

“The available workforce and technical advances created in the sector have the capacity of catering the demand for Rs 60,000 crore. However, the industrialists and state and central governments have a major role in turning the vision into a reality. Skill development, investment in research and development for exploring new markets in technical textile and creation of new hubs will pave way for achieving the target,” says Raja Shanmugham. Establishing Knitwear board based in Tirupur and exclusive design studio will help on a long-term basis, he adds.

 

According to the organising committee member of Tirupur Thozhil Pathukappu Kuzhu (TTPK), and a garment exporter, T.R. Vijaykumar,  “The industries, which cater to the requirements of foreign buyers on social, ethical and environmental factors can survive in the industry.”

 

Garment manufacturers feel that the online sales have come in handy to capture the domestic market. Within two years, the growth of online market in India will grow significantly. 

 

The digitalisation of knitwear retail trade will increase the profit margin also, they hope Says another exporter, Girish, “The stable growth of market demand is an encouraging factor for Tirupur.”

 

 

While Tirupur garments are costlier, China, Bangladesh and Vietnam offer it at a considerably cheaper price. “Our products are priced higher than the competing countries by 20 per cent to 30 per cent,” reveals M.P.Muthu Rathinam, president of the Tirupur Exporters And Manufacturers Association. 

 

The Indian knitwear industry contributes only four per cent of the global demand, despite its higher quality and design. However, in order to increase the contribution in the world market, price competitiveness has to be improved. 

 

High labour cost and lack of skilled labour is hitting the Tirupur export industry.  Besides, traditional export markets of USA and European countries, buyers from Israel, Japan, South Africa and Middle Eastern countries are coming with orders. 

 

“However, when new orders are about to conclude, it gets dropped at last minute on price factor,” says Muthu Rathinam The lack of skilled force is also reducing the productivity. 

 

“The industry requires about one lakh trained tailors for fulfilling current and future requirement. However, we are struggling to complete the orders with available workforce.”

Imported knitwear products from China and Bangladesh are also flooding the domestic markets. 

 

According to K.S. Babuji, general secretary of South India collar shirts and Inner wear Small scale Manufacturers Association (SISMA), the North Indian markets are flooded with Chinese and Bangladesh products. “Our products are higher in quality and design compared to China and Bangladesh. But the price difference of about 25 per cent gives them the advantage.”

 

Introduction of Goods and Service Tax and restricting import by imposing anti dumping duty is the need of the hour. 

Signing of Free Trade Agreements with new markets, increasing of duty draw back rate based on global market trend and financial assistance for foreign business meets will help improve the competitiveness, says Muthu Rathinam.

 

There is huge difference in bank interest rate for industrial loans provided by India and the other competing countries like Bangladesh and Vietnam. “We are levied with more than 8.5 per cent interest, while the Bangladesh and Vietnam provide loan at the interest rate between 3 per cent to 4 per cent,” say exporters.