The subsidy announcement by Central government of close to Rs 300 crore for applications under the Technology Upgradation Fund Scheme (TUFS) from Gujarat seems to have already turned the struggling textile industry around Surat bullish.
Barely a year ago was the industry witnessing several units on the verge of closure that it is now expecting more number of units coming up, especially in the synthetic yarn, fabric and processing verticals.
For instance, the industry in Surat was struggling to meet a widening demand-supply gap in synthetic yarn. “Surat constitutes around 60 per cent of country's total synthetic yarn weaving. Yet, there is about 10-15 per cent demand-supply gap in yarn which has resulted in an upswing in its prices,” said JN Singh, joint secretary, Ministry of Textile, Government of India earlier.
Yet, according to industry sources, the textile industry around Surat is aiming at doubling its growth rate by next financial year.
“Currently, the industry, which is predominantly into synthetic goods, is growing at around 8-10 per cent. The TUFS subsidy will definitely boost the industry and result in more number of units being set up. Last year when almost half of the 450-odd processing units were on the verge of closure, however, the scenario is changing gradually,” said Devkishan Manghani, general secretary of Federation of Surat Textile Traders Association (FOSTTA).
According to Manghani, manufacturers have already begun installing modern machinery for their units. This despite the fact that the industry is currently witnessing 30-35 per cent reduction in sales.
“Inflation and delayed monsoon has resulted in decrease in domestic sales for the industry. Add to that, grey cloth raw material prices have risen by 8-10 per cent,” he added.
The industry’s turnover from synthetic ready goods amounts to over Rs 30,000 crore per annum.
