Dull Diwali for India’s top textile hub of Surat with 50% drop in orders for festive season

The market size of India’s textile industry is more than $200 billion, and more than 60 per cent of the cloth manufactured in the country comes from Surat. With more than seven lakh weaving machines across 400 units, the city weaves a daily turnover of Rs 150 crore from textiles. But despite bouncing back from the pandemic last year, the Surat textile industry’s business has dipped by 50 per cent in Diwali this year.

Textiles losing their spark in diamond city?

Known largely as the Diamond city, Surat also has a thriving textile sector which received orders worth Rs 16,000 crore for th festive season last year. But this year the celebrations are shadowed by a cloud of gloom, as business is down to Rs 8,000 crore. Although shops are reporting a high demand from consumers, they aren’t taking cloth from Surat, since they are already clearing up a stock that had piled up over the past two years.

Hopes of festive cheer dashed

The festive jolt has hit hopes of Surat’s textile mills which were hoping for a brighter Diwali after dipped by 30 per cent year on year between July and August. The downturn is even more painful because Diwali sales make up 70 per cent of the annual business for the textile hub. Earlier this year, president of South Gujarat’s textile industry body also reportedly described a festive revival as essential for survival.

Looking for respite abroad

To tackle the downturn, Surat’s textile sector, which gets 90 per cent orders from domestic buyers, has also turned to exports. Earlier this year, businesses from the city finalised deals worth $150 million with foreign buyers for man made fiber textiles. But even when it comes to overseas market, falling demand abroad has led to a 40 per cent decline in cotton yarn and handloom exports.

Orders dropping while operating costs go up, has also led to lower working days at units in textile powerhouses of Surat and Andhra Pradesh, which may lead to layoffs. The low demand has also slashed prices of textiles, for instance some fabrics have become cheaper by as much as Rs 8 per metre.