Surat's textile industry in chaos as firms go kaput

The textile industry of Surat, which is largely responsible for the growth witnessed by the city in the last few years, is passing through a turbulent phase owing to the closure of a clutch of companies in the last couple months.

According to an estimate, the local textile industry has suffered losses to the tune of Rs 75-100 crore due to the closure of these firms.

"Weavers alone have lost around Rs 40-50 crore because of the textile firms going defunct. It is not possible to completely eliminate this menace, but we have asked weavers to remain careful while dealing with any company. We have also started implementing some measures and hopefully the problem can be checked," said Bharat

Patel, general secretary, the Federation of Gujarat Weavers' Association.

"Earlier the only problem the weaving industry faced was recession, which led to a fall in demand and the resultant reduction in grey prices. Recession is still an issue, but it is nothing as compared to the problem of companies going defunct," he said.

According to Patel, in the last five months (since Diwali) several firms such as Kunvar Ajay Sarees (amount lost Rs 17 crore), Shia Sarees (Rs 8-10 crore), LTC Corporation (Rs 6 crore), Vaibhavi Prints (Rs 10-12 crore), Rajlaxmi Sarees (Rs 1.50 crore) and Kanchan Sarees (Rs 70 lakh) have gone out of business.

Devkishan Manghani, the spokesperson of the Federation of Surat Textile Traders Association expressed concerns over the firms going defunct in recent times.

Manghani said, "The situation in the textile industry is extremely bad. These instances of firms going defunct, especially the rate at which they are taking place, pose great dangers to the existence of Surat's textile industry. Traders are responsible to a great extent for these instances as in most cases, details of the parties are not verified or cross-checked."

"At the same time, the police is equally responsible, if not more, for instances of so many firms going defunct. Whenever we approach the police, they say it is a civil matter and ask us to approach the court. The recent example of Kunvar Ajay Sarees is a testimony to the same. We approached the police several times, but they gave no response to us. It was only after we threatened to agitate that steps were initiated against the group," Manghani said.

The FOSTTA spokesman suggested that the state government should set up a separate economic offenses wing for the textile industry at the earliest, as it would help taking quick action against those indulging in monetary offenses.

Former Union textiles minister Kashiram Rana was not available for comments.