Demonetization woes hit India's knitwear centre
With the onset of demonetization, India's knitwear hub, Tirupur, was hit drastically by the liquidity crunch, according to reports. Since lakhs of workers across Tirupur's maze of garment units are paid by cash, the industry faced significant impact. Pitched to thrive as a cash-based economy, the labour-intensive industry which had an annual business amounting to Rs.40,000 crore, is currently witnessing weak revenue growth.
Knitwear industry in India
India's thriving knitwear industry has made robust contributions to the country's economy and employment. With units across Ludhiana in Punjab, Delhi, Bengaluru, Mumbai, and Tirupur in Tamil Nadu, the knitwear market accounts for about 45 percent of India's apparel exports. Export figures for the domestic knitwear industry had jumped from $1,786.88 million in 2000, to over $5,047.80 million by 2010.
India's knitwear hub
Tirupur is touted to be the country's knitwear hub, churning out garments valued at over Rs.13,000 crores. Last year, the knitwear exports from Tirupur touched Rs.21,000 crores compared to Rs.18,000 crores in 2013-14. This translated to a growth rate of nearly 16 percent year-on-year. Global brands like H&M, Tommy Hilfiger, Nike, M&S and Diesel import their clothing items from Tirupur.
Estimates pitch exports worth Rs.50,000 crores from Tirupur this year
The Tirupur Exporters Association (TEA) estimates that Tirupur would generate exports worth a whopping Rs.50,000 crore this year, with industry experts expecting the knitwear sector in Tirupur to grow beyond Rs.1,00,000 crore by 2020.
PM Modi's demonetization move spurs strikes, cash crunch
Prime Minister Narendra Modi's demonetization move resulted in lakhs of workers in Tirupur's knitwear sector devoid of cash. Around 5,00,000 workers were left without being paid their wages, reports said. Most of these workers were reported to not hold a bank account and relied on cash transactions. Political parties and their trade unions resorted to day-long strikes, hoping to make an impact.
Garment stores face gloomy sales, increasing export-reject surplus
"This is a cash-and-carry business; as there is no money floating in the system, people cannot purchase anything from here. But it is really difficult for us. Our sales have fallen by nearly 70%", a garment store owner says.