India′s textile hub faces crisis | Asia| An in-depth look at news from across the continent | DW | 13.04.2011
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India's textile hub faces crisis

Rising cotton prices have hit India's garment industry. In the textile hub of Tirupur, matters have been compounded by a recent court order shutting down fabric-dyeing units.

A garment manufacturing factory in Tirupur

Few garment manufacturing factories are running, while many have closed down

Sangeetha Venkatesh did not choose to be a housewife. Yet she has been forced into unemployment because many fabric dyeing and bleaching units in the industrial town of Tirupur in southern India have to shut down.

When her family moved there four years ago, Sangeetha and her husband worked at the garment factory, and her father-in-law Prabhu went to work at the dyeing unit. While she was at work, Sangeetha left her six-year-old son with her mother-in-law.

Sangeetha Venkatesh was forced to quit her job because of the export industry crisis

Sangeetha Venkatesh was forced to quit her job because of the export industry crisis

But after the dyeing unit closed down, Sangeetha and her husband Prabhu moved back to their native village in the hope of finding work. With no-one to look after her son, Sangeetha had to quit and stay at home.

"Earlier there were three people earning in my family, now it is just my husband, who has to support us as well his parents," Sangeetha recounts. Now the family has to think twice about every expenditure, she adds, including the costs for their son's education.

Rising cotton prices

A failure of the cotton crop this season as well as the Indian government’s decision to allow cotton exports has led to a 100 percent increase in raw cotton prices and a 70 percent increase in the price of cotton yarn, leading to an overall increase in production costs.

Exporters now fear they may not be able to execute orders worth around 500 million euros from clients, the majority of which are in Europe and the US. They feel they may lose business to their competitors in China and Bangladesh. Many units are on the verge of closing down, putting at risk the jobs of thousands of local and migrant laborers.

Tons of harmful effluent polluting the river

Sangeetha's family is just one example of the 500,000 workers who had poured into Tirupur from all over India, drawn to its success in the garment export industry. In just a few decades, Tirupur has spawned thousands of spinning mills, knitting and manufacturing factories, printing and dyeing units and other associated industries, making it the driving force for garment exports in India.

The Noyyal river is highly polluted due to indiscriminate dumping of effluents by dyeing and bleaching factories

The Noyyal river is highly polluted due to dumping of effluents by dyeing and bleaching factories

But manufacturing a growing bulk of export quality clothing came at a steep price. Fabric dyeing, which is one of the key processes in the production chain, produced tons of harmful effluents. For years, they were dumped blindly into the river Noyyal. Today, the river is contaminated and has been rendered useless for other purposes such as irrigation.

After a High Court order, the state Pollution Control Board shut down over 750 dyeing units. This severely affected business for the exporting community, which was already struggling with rising cotton prices, says Reuben Swamidoss, the owner of Century Apparels, an export unit in Tirupur.

For Swamidoss, the situation at the moment is creating "a lot of uncertainty". "This is a peak time for us to sample and book orders when we don't know immediately what solution is going to emerge," he explains. "It is going to affect many different small industries associated with the big industries, whether it is knitting, compacting or dyeing."

Dyeing units in textile hub Tirupur

Dyeing units such as these are now lying idle since the High Court closure order

Factories running below full capacity

In 2005, a similar shut-down order by the High Court was resolved after dyeing units assured the government they would invest in technology to ensure 'zero discharge' of effluents into the river. But while many dyeing units set up effluent treatment plants, many continued to dump effluents into the river illegally.

Now, despite government subsidies to help set up common effluent treatment plants, dyeing factory owners say 'zero discharge' is practically not feasible. Those who are still in business say they are being forced to operate their factories below full capacity.

Effluent treatment plants in Tirupur

Not all dyeing units can afford effluent treatment plants

Bharath Balu , owner of a dyeing unit in Tirupur, says that a lot of dyeing units have taken bank loans as their share, along with subsidies and benefits from the government. "So, they have to pay back their loans, as well as the interests," Balu points, adding that this will be impossible to do if the units do not run their industry in profit.

The dyeing industry is now looking to the government to run the effluent treatment plants. While a long-term solution is still to be found, the future remains uncertain for India's garment export industry and thousands of workers.

Author: Pia Chandavarkar (Tirupur)

Editor: Thomas Baerthlein

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