From the hub: Shades of distress colour Punjab's weaves and drapes

The second of a three-part series on export slowdown looks at the textile hub in Ludhiana, often referred to as India's Manchester, to understand the setbacks and challenges there

“Last Sunday, I didn’t do good business. God willing, I should have a better day today,” says 52-year-old Gurcharan Singh, who has been selling shirt materials for over three decades in Chaura Bazaar, Ludhiana’s oldest textile market.

From the crack of dawn, scores of men, women and children start thronging the streets of Chaura Bazaar. Located opposite the Victorian era clock tower, the market, which derives its name from its ‘wide’ streets, has been the nerve centre of the town’s primary industry — textiles — for over two centuries. The bazaar is filled with thousands of sellers like Singh who deal in products such as apparel, woollen garments, suiting, hosiery, under-garments, drapes, carpets, curtains, and so on.

Rajwant Maan (64), a farmer from neighbouring Phillaur across the Sutlej river, who has been visiting the market since his childhood, has come to buy clothes for his grandson’s wedding next month. But the market has been losing its sheen over the. years, Maan says ruefully. “Earlier, people would come to Ludhiana from all parts of Punjab to buy clothes. However, the market here has not been able to keep pace with the latest trends in the industry. Young people hardly come to these old markets. They prefer buying from the malls which offer them the latest global trends at reasonable prices,” he adds.

Ludhiana, Punjab’s Rs 20,000-crore textile hub, accounts for over 90 per cent of India’s apparel production for the domestic market. But for the past few years, the sector, which mostly comprises micro and small businesses, have had repeated setbacks such as demonetisation, the introduction of the Goods and Services Tax, the Covid-19 pandemic, among others. 

Sudarshan Jain, president, Knitwear and Apparel Manufacturers Association of Ludhiana, says that the city’s mostly small and medium industry-based production has taken successive blows in the past few years. Cheap imports from neighbouring countries like Bangladesh, China and Vietnam have also been a huge problem for the industry. 

“At least 20 per cent of the roughly 18,000 odd micro and small production units in the city have shut down since the pandemic. If things are not placed in order, large players are also staring at financial defaults,” Jain says. 

The latest index of the industrial production (IIP) data series for the month of August showed that manufacturing in the apparel sector has fallen below the level of August 2011-12, when the new series started.

The successive disruptions in the supply side of the sector have also had an impact on exports. Data sourced from the commerce ministry showed that the total value of Indian readymade garment exports fell by nearly 15 per cent to $6,916 million during April -September 2023, down from $8,117 million in the corresponding period last year. Meanwhile, exports from Punjab have seen an almost 18 per cent decline over the same time period.

“The demand is already broken in the European market with the ongoing economic crisis due to the Russia-Ukraine war. With the outbreak of a war in west Asia as well, our export prospects for this year look bleak. In the American market, we are already at a disadvantage vis-a-vis Vietnam and Bangladesh due to lower tariffs,” says Ashwani Aggarwal, general manager, Nahar Spinning Mills, based in Ludhiana.

The distress in the city’s textile industry has not only affected producers and exporters, but also the nearly a million strong migrant workers who are engaged in some capacity or the other at every step of the value chain.  

Nanhe Ram (44), who hails from Jharkhand, has been travelling to Ludhiana for the past 18 years along with his cousins to work as a dyer in one of the mills. Like hundreds of other migrants, he is no longer able to get regular work.

“It’s the start of the festive season and we are still sitting idly here at the chowk. Earlier, we would earn enough and head back home around March. But now despite remaining here for so long, we have earned very little. On top of that, living costs have also increased here,” he says.

Harish Dua, founder chairman, KG Exports, believes that one reason why the Indian textile industry loses to China and other southeast Asian neighbours in the world market is due to their cheap and skilled labour, who are able to execute the latest demands of the market. 

“Though we have a steady labour supply, they are not skilled. WE need to develop a research and development facility along with training clusters which will not only train the producers about the newest trends but will also skill the labourers to run the newest machines. We also need to have cheap housing clusters and transportation for them to lower their living costs,” Dua adds. 

To make the sector competitive, the central government has launched the PM MITRA (Pradhan Mantri Mega Integrated Textile Region and Apparel) scheme with a projected investment of nearly Rs 70,000 crore, to create an integrated textiles value chain, right from spinning, weaving, processing and printing to garment manufacturing at a single location. Curiously, Punjab is missing among the list of seven states selected under the scheme.

“Non-inclusion of any site under the scheme represents further harm to the sector and the industry in Ludhiana, as it was a great opportunity for the disintegrated sector to consolidate itself both horizontally and vertically and make itself competitive. But perhaps this is the state of affairs we have to live with,” rues Jain.