Surat – the biggest manmade fibre textiles hub in India has once again been haunted by the specter of defaults in payments to weavers by textile traders, just a few days ahead of the Diwali festival, a time when, business is at its peak.
The textile trade in Surat clocks annual revenues of more than Rs 200 billion and is spread over around 140 textile markets involving 55,000 small and big traders.
Explaining the reasons for the defaults, Mr Devkishan Manghani, President of Federation of Surat Textile Traders' Association (FOSTTA) says, “During Diwali or the period before that, people mostly prefer to do business in cash, be it weavers or millers. They have to settle accounts and also they have to give a bonus salary to laborers, workers and staff.
“Besides, they also have to make payments for the chemicals, yarn, etc, which need to be cleared before the festival. Due to this there is high need for cash liquidity. Many times, the rotation is not so smooth and so there is discomfort among people in the market. Hence, such cases are on a rise during the festive period.
“To avoid this situation, a trader should plan from the beginning as to how much payment he will have to clear till Diwali and how much cash he will need, provided he is a genuine party. If he is a fraud, then nothing can be said about them because cheaters have no ethics. The fraudsters also take benefit of the holidays that follow the festival i.e. the period when the entire market is closed for about a week to 10 days.
“FOSTTA has always appealed to the traders that out of 10 customers they should supply goods only to 7 of them. If there is discomfort or if someone is loaded with over-production, then they should select 7 genuine parties and ignore the remaining 3 or keep them on hold.
“In such a case, the production can be done for the selected parties and if remaining 3 parties want the goods, then they can be dealt with under some terms and conditions so that the discomfort is minimized and rotation is smooth. Once there is a flow, only genuine parties come across”.
Revealing the current market situation, he informs, “The current market condition is not good and we also do not see a good festive season ahead. Due to inflation, sales have been less since there is no purchasing capacity among people”.
Fibre2fashion News Desk - India
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