TIRUPPUR: After weathering the twin challenges of Covid-19 pandemic and the Russia-Ukraine war, India's knitwear hub Tiruppur in Tamil Nadu seems to be on the path of revival, with exporters pinning hopes on the positive growth recorded in January to continue its momentum.
Industry insiders said the three-month average negative growth recorded in 2022 was at 24 per cent as it was largely impacted by the recurrence of Covid-19 pandemic in various European countries and also due to the Russia-Ukraine conflict.
So much so the two issues even altered the Europeans' pattern of using a particular T-Shirt.
"Exports came down between July and December 2022. The three month average negative growth will be 24 per cent. However, from January it has increased marginally. I would say in dollar terms a 2 per cent rise while in Rupee it is 11 per cent," Tiruppur Exporters Association (TEA) President K M Subramanian told PTI.
According to him, exports were largely impacted due to another wave of coronavirus spread last year in various European countries.
The Russia-Ukraine conflict also dealt a blow to the trade as several European nations preferred to remain 'cautious' on making expenses following a surge in inflation and rise in essential commodities, impacting the largely export-dependent knitwear units of the town.
Tiruppur is located about 400 km from state capital Chennai.
In the wake of the war in their neighbourhood, several European countries are experiencing higher inflation, increase in prices of fuel, power and mainly essential commodities, he noted.
A large number of Europeans have stopped making purchases due to high inflation, which also led to non-clearance of inventories.
For instance, a person in Europe wears a t-shirt three or four times before going in for a new one.
"Now due to the impact of covid and the war, he has started to use the t-shirt 10-15 times. So they have started to be cautious on expenses," he said.
"Since large traders in this industrial belt are micro, small and medium enterprises units, they largely depend on orders from Europe.
They were largely hit due to the impact caused by the pandemic and the Russia-Ukraine conflict.
Now there is a positive sign with the industry witnessing a 1.5 per cent growth in January.
The knitwear industry, after bouncing back to a positive sentiment in January, is expected to witness good business in the coming months, he said.
Subramanian said normally, spinning mills stop functioning for two or three days in a week due to low demand but the operations are seeing an uptick now.
"Now, the spinning mills are being operated on a daily basis because of rising demand. This is a positive sign for exports," he said.
Knitwear exports from Tiruppur in USD terms grew 1.5 per cent at USD 413 million (in January 2023) while overall knitwear exports from the country grew by 0.9 per cent at USD 751 million in December 2022 as against USD 744 million in January 2022.
According to him, Europe and the US account for the majority of the export orders.
"Orders have started to come in from Europe and the United States," with the former accounting for 60 per cent of this, he added.
"Actually, if you see the growth in January it is 1.5 per cent growth recorded on exports. It is not a huge jump compared to the same period last year," a senior official of a knitwear unit said but seemed hopeful over things looking up for the labour-intensive sector.
"We expect this trend to continue. This growth itself is a positive sign which we expect to reflect in the coming months. People have started to place orders, but not in a huge manner as in the past. " he said on condition of anonymity.
The all India knitwear exports in 2021-22 stood at Rs 49,443 crore while it was Rs 26,923 crore from Tiruppur during the same period.
In 2022-23, all India knitwear exports were at Rs 53,586 crore as against Rs 29,643 crore from Tiruppur district, data provided by Tiruppur Exporters Association revealed.
In Tiruppur more than 6000 units are engaged in knitwear, stitching, dyeing, embroidery. Knitwear accounts for more than 70 percent and nearly 5 lakh people are employed.