Reported on: June 08, 2012 13:50 PM
Reported in: Business
Chennai, June 8 (UNB) - Apparel export units in Chennai that once made waves globally for their woven men’s wear, including with the famous Madras Checks, are struggling to survive in the face of intense competition from Bangladesh, besides rising costs of labour and power.
As many as 33 units in and around Chennai have closed down over the last two years, said representatives of the Apparel and Handloom Exporters Association, reports the Hindu.
Five years ago, the labour-intensive sector was vibrant and the number of units in Chennai was over 400. Closing of every unit translates into hundreds of people losing employment. The closure of the 33 units, they estimated, affected 40,000 employees. Listing major reasons leading to the present situation, the Association president Ranjit P. Shah said the first was the abolishing of the quota regime followed by emergence of Bangladesh as a major competitor. "The labour laws in Bangladesh are not as stringent and less in numbers compared to India. The salaries paid to the workforce there are also much less," he said.
Finding people to work in the units in the city, however, has become hard with the growth of other industries around Chennai. Prakash C.Sacheti, Vice President of the Association, said it would be difficult for the garment industry to survive unless the State and Central governments give them the right incentives, including power supply at preferential tariff.
In view of the declining orders, a few of the units made a foray into the domestic market, where the sales continue to rise with growing preference for readymade garments, but this did not help them much. “We tried our own brands, set up shops, but only a few of them survive today,” said Mr.Sacheti.
Treasurer of the Association K.U. Abdulla said the duty concession available on imports from Bangladesh was also a reason for the buyers to go there.
A release issued by the Association said local retail brands were also importing from Bangladesh as it is cheaper. Well known wholesalers like Globus, Pantaloon, Big Bazaar, Lifestyle have already shifted or planned to open offices in Bangladesh to take advantage of duty free imports of some 46 apparel items. Apparel exports, the Association members, including K. Shivachandra Reddy, said were important as a component of textile industry and need to be encouraged.