WHY INDIA'S KNITWEAR CAPITAL IS IN DOLDRUMS

Tiruppur is being weighed down by multiple challenges. Will the latest crisis force the industry to change?

- N. Madhavan

A keen observer will notice that Tiruppur, the knitwear capital of India, is in distress—the signs are very visible. Traffic in the once-busy town is unusually light. The trucks carting textile materials around the town are conspicuous by their absence. Most are parked at the town’s large truck stand in the Royapuram area, where the drivers pass time watching movies on their phones.

“When things were good, we barely had time to grab food. Today the problem we face is that we do not have enough movies to watch," said one truck driver wryly. He was not willing to reveal his name.

Shopkeepers, meanwhile, say footfall has plunged as uncertainty over the future has forced customers to tighten the purse strings. Hundreds like Balaji have been laid off, and are forced to seek other forms of employment to make ends meet. The mood is palpably grim.

The reason for the despondency is the state of the knitwear sector, which is the lifeline of the town. Tiruppur accounts for 55% of India’s ₹60,950 crore knitwear exports (typically T-shirts and vests). However, a sharp contraction in export orders in the wake of the Russia-Ukraine war, the impact of imports on domestic demand, and volatile cotton prices have left the industry struggling.

Capacity utilization has dropped by as much as 60% and this has hit Tiruppur’s micro, small and medium enterprises (MSMEs), which comprise 90% of the units in the sector. “Demand has been dull in the last few months. Inflation in buyer countries has forced people to prioritize spending on fuel, food and meeting loan obligations. Clothes are not a priority right now," explains K.M. Subramanian, president, Tiruppur Exporters’ Association (TEA).