Scattered through the length and breadth of Kanpur, the bustling industrial town in central Uttar Pradesh, are nondescript cotton hosiery units, which directly support the livelihood of almost 1,00,000 people.
Yet, the nearly Rs 500-crore Kanpur hosiery industry, which ranks amongst the top three domestic cotton hosiery centres in the country alongside Tirupur (Tamil Nadu) and Kolkata (West Bengal), has just about managed to survive the onslaught of competition and its utter failure to upgrade its plant and machinery and manpower.
The striking fact that Kanpur contributes merely 10 odd percent of the domestic cotton hosiery market indicates the dismal state facing the industry, which looks caught in the time warp and refusing to dream big.
The industry continues to face structural challenges in the form the scattered nature of units, absence of common facilitation centres and lack of trained manpower. Besides, there is pressing need of a modern lab in Kanpur to test dyes and chemicals, which could be banned in other countries.
“Sadly, there is also the dearth of local entrepreneurs, who want to promote their brand nationally and internationally,” UP Hosiery Manufacturers Association patron Balram Narula told Business Standard . He is also the Managing Director of Jet Knitwears Private Limited, which is Kanpur’s biggest cotton hosiery brand. It advertises extensively in national print and electronic media.
There are about 500 cotton hosiery units apart from over a thousand small knitting, processing and stitching units across Kanpur. To make the matters worse, the sector has been witnessing flat growth over the last couple of years due to the general economic slowdown.
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While, the units in Tirupur and Kolkata cater both to the domestic and international markets, including West Asia and developing countries, the exports from Kanpur have came to the naught over the years. There are sporadic exports by middlemen or big trading firms sourcing finished goods from Kanpur, but the local manufacturers and traders have had no direct play in the offshore markets for a long time, industry insiders maintain.
Till some years back, the industry had been facing higher tax slabs as well. However, the tax differentials ceased to exist with the implementation of Value Added Tax (VAT), which brought the Kanpur industry at part with its counterparts in other states.
Since, most hosiery units are located in the city areas, they also lack space for expansion. There have been demands that such units could be provided land available with closed/sick National Textiles Corporation (NTC) mills, but nothing has been done by the authorities so far.
Another factor that blunts the competitive edge of Kanpur hosiery industry is that most of the raw materials are processed and sourced from outside Kanpur, including yarn. All the state run spinning mills in UP are already defunct or sick.
“If the state spinning mills were functional, we would be getting yarn at not only cheaper rates but at short notice as well. This would drastically cut our cost of production and increase our competitiveness,” Northern India Hosiery Manufacturers Association president Manoj Banka claimed.
He maintained it would improve margins by 5-6 percent and boost revenues by nearly 25 percent for the local manufacturers. Banka operates a dyeing and bleaching unit M K Dyeing Industries in the Panki area of Kanpur.
The other issues facing the industry include increasing raw material costs, inadequate dyeing & processing facilities, difficulties in getting requisite financial support from financial institutions, rising competition, low profit margin and lack of brand image.
“Since, hosiery sector is labour intensive, the government should provide tax rebate based on its employment potential. The government must realise there is only little scope for automation in this industry due to the nature of production,” he noted.
Apart from the apathy of the state government in failing to promote the indigenous hosiery industry, the stark truth is that Kanpur units have failed to innovate with their designing and packaging. Similarly, training the manpower that ultimately stitch the garments would further enhance the appeal of the finished product.