Chikan traders, carpet weavers opt for domestic consumers in the downturn.
The small and medium entrepreneurs in Uttar Pradesh have formulated a strategy to counter recession. Exploring domestic markets has emerged as the best option. Overseas markets have dried up, so this strategy does make sense. Small units have now decided to opt for cheaper products keeping in mind the domestic need.
The silk garment manufacturers in Varanasi and Azamgarh are scouting for markets in smaller towns, the Chikan manufacturers in Lucknow are concentrating on designing for local markets. Most of the Chikan exporters in Lucknow are small.
However, operating margins for them have come down after orders from overseas markets have dried up. Orders from Pakistan, especially have dried up, as tensions between the neighbours is affecting businesses.
According to Narendra Kapoor, a chikan manufacturer, the demand from Pakistan has gone down. He said every year a large number of people used to come to Lucknow and purchase in bulk from the local Chikan market. “Now, fewer people are visiting UP and purchases have gone down,” he said.
The small traders are finding it tough to cope with growing raw material materials. Samir Kumar, another trader, said: “We are also facining challenges from big traders, who use to come to Kakori and Malihabad village with bulk orders,” he said.
Taking the strategy of focusing on domestic markets a step forward, Chikan traders are designing products that could be sold in small cities. CK Chabra, chairman, UP Chapter of Silk and Handicraft Promotion Council, also supports these steps. He added something drastic needs to be done for the sector. He said none of governments has paid attention to the SMEs in the Chikan and Silk sector. “We still have to depend on money lenders for our monetary needs,” he said.
Madhuri Pathak, a silk exporter from Varanasi, said the the idea of concentrating on the domestic markets was good and was a good way to improve the situation. “It would be best to offer international quality garments to domestic customers,” she said. She said India has big domestic markets and instead of running after international orders, SMEs can earn profit from their own country. She said that in the current conditions, SMEs will have to operate on low-cost and margins. Once the market recovers from the current downturn, hey days will come back, she added.
It may be mentioned that a large number of silk garment manufacturers in Varanasi region have launched products at cheaper rates. This is helping them get over from the crisis. Carpet makers in Bhadohi, Gopiganj and Chandauli have also adopted a similar strategy.
