Chennai fabric export units face closure
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Chennai, known for its Madras Checks the world over, is fast losing its status as a leading woven apparel exporter to its Bangladeshi counterparts.
The city, which had about 500 woven units exporting men’s wear about three years ago, has only about 100 such operational units left now.
“With largely subsidised fabrics from Bangladesh flooding the market, south Indian woven fabrics industry is at great peril,” lamented Mr Ranjit P. Shah, president of apparel and handloom exporters association. Around 33 leading exporting units have shut shop in the last few years leading to a loss of 45,000-plus jobs, he added.
“In last two years, Chennai industry has suffered unfair level-playing fields, specially from Bangladesh because of cost escalation in the production that has made our CMT (cut, make and trim) costs uncompetitive,” said Mr Prakash C. Sancheti, vice-president of the association.
India signed a pact in September last to permit duty-free access for 48 apparel products including knitwear from Bangladesh under the South Asian Free Trade Agreement. This zero-duty access to the $3-billion Indian apparel market will enable the tiny nation to capture a sizeable Indian market owing to its low labour cost and other inherent advantages, lament exporters.
Already, Bangladesh garment exports in 2010-11 were a tad higher at $15 billion while Indian exports stood at $11.16 billion then.
“Our costs are further escalated with irregular power situation in the state, cumbersome import restrictions on the industry and high minimum wage restrictions owing to outdated labour laws,” claimed Mr Shah. Though exporters have sought a financial assistance package from the Centre and a differential power pricing from state, they do not see this coming.
“Madras Checks which started the entire export industry 40 years ago, is now in peril with the closure Chennai units. Unless we check this trend, our new skill development centres will be creating more unemployed people with fewer jobs”, Mr Sancheti said.
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