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Diesel price hike affects Surat textile sector
19
Sep '12
Transportation plays a key role in the textile sector and any changes in transportation charges affect the cost of finished textile goods. The recent hike in diesel prices has resulted in increased transportation costs, which is affecting the manmade textile hub of Surat.
 
Mr. Devkishan Manghani, President of the Federation of Surat Textile Traders Association, spoke to fibre2fashion on this matter. He says, “The transportation charges have been increased by 10 to15 percent per kilogram of textile products. The reason behind this is the hike in prices of diesel.”
 
“The price of diesel was Rs. 45 per litre in Surat, which has been increased to Rs. 50/litre now. Moreover, the VAT applied on this increases another one rupee. Hence, the hike comes out to around 13 percent which is high enough for the transporters to increase their freight charges,” he adds.
 
He informs that the increased transportation costs will further affect the price of finished fabrics. “Transportation plays a very important role in the entire fabric manufacturing process, beginning right from POY to yarn to grey and so on, till the finished fabric is made,” he avers. 
 
“Because the intermittent textiles move so much, the price of the end product is sure to increase along with the intermittent products. Consequently, the overall price of the fabric will also increase by 10 to 12 percent,” he explains.
 
When quizzed about the steps that they are planning to take against the price hikes, he replies, “We shall close down our shutters on September 20 to protest against the Government’s decision to allow FDI in multi-brand retail as well as the hike in diesel price, which affect the textile industry.”
 
However, an optimist Mr. Manghani concludes, “In India, the textile and clothing industry booms only for two reasons – festivals and wedding season. The biggest Indian festival Diwali is just round the corner and we hope that the industry would fare well.”
 

Fibre2fashion News Desk - India

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