Home / Knowledge / News / Textiles / Cash crunch bites Indian textile industry
Cash crunch bites Indian textile industry
Nov '16
Textiles, the second largest industry in India, is seeing dull days post demonetisation of Rs 500 and Rs 1000 notes. Few textile units pan India are mulling shutdown while some other units have stopped production temporarily. The Centre’s decision has affected the entire chain of people involved in the process of producing and selling of the textile items.

“This is a temporary phase but the pressure will be built on every week till the issues are addressed. It will take at least two months for the business to get back on track. The only way to deal with this cash crunch is by changing our payment system,” VD Zope, chairman of The Textile Association (India) told Fibre2Fashion.

Since most of the transactions in textile industry are done via cash, it has become difficult for retailers to do business with the cash crunch. This is likely to affect over 15 crore people who are directly or indirectly linked with the textile and its ancillary industries.

“Once a unit is shut down, restart expenses will be a lot. We can make up for the loss only if the situation improves within 10-15 days. However, it does not seem that the cash flow will increase in the market in the coming weeks,” said Jitendra P Vakharia, president of South Gujarat Textile Processors Association.

Vakharia said he will raise this issue with Union textiles minister Smriti Irani, who is visiting Gujarat on Saturday.

Chairman of Southern Gujarat Chamber of Commerce and Industry’s (SGCCI) textile committee Devkishan Manghani said, “Usually, we produce 3-4 crore metres of cloth per day. Today, the production has reduced by 50-60 per cent. Sales have also reduced drastically. The trade has not picked up after Diwali. With low production in the textile units, labourers are also going back home. Most of the labourers in the textile industry are from Bihar, Uttar Pradesh, Orissa and southern states.”

Raising concern over the rise in the number of textile units shutting down in Ahmedabad, Nitin Thakkar, president of Ahmedabad Textile Processors’ Association, said, “Around 50 per cent of the textile units in Ahmedabad have closed. The situation is getting worse. The entire chain of production and sale of textile products has been hampered. It has not been possible for us to do full-fledged business after November 8.”

“The weekly cap for cash withdrawal is also very low. Industries like us at least need 5-6 lakh per week to bear daily expenses,” added Thakkar.  (RR)

Fibre2Fashion.com – India

Must ReadView All

Courtesy: Pexels

Textiles | On 19th Sep 2018

Punitive PRC tariffs on US goods has extra 5% on textiles

Responding to Washington’s latest duty increase in a dispute with...

Courtesy: Tecnorama

Textiles | On 19th Sep 2018

'Reliability & excellent quality are Tecnorama’s USP'

The complete reliability and excellent quality of Tecnorama systems...

Courtesy:  Stanislav Kondratiev on Unsplash

Apparel/Garments | On 19th Sep 2018

AAFA questions US tariffs on $200 bn Chinese goods

The American Apparel & Footwear Association (AAFA) has questioned...

Interviews View All

Riddhika Shah, SS Homme

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Rahuul Jashnani, Jashn

Rahuul Jashnani

‘Online economy has changed the whole dynamics of buying habits.’

Karel Williams, Dow Microbial Control

Karel Williams
Dow Microbial Control

'Silvadur is most rapidly adopted in areas where hygiene-conscious and...

Harsh Shah,

Harsh Shah

Fynd is the central online shopping destination for fashion, offering...

Karen Lou,

Karen Lou

Australia-based Sunseeker has been creating swimwear since 1970. Sunseeker ...

Sandip Bhojani, Manthan Patel,

Sandip Bhojani, Manthan Patel

Krypthm Tradelink LLP is a Surat-based manufacturer of westernwear....

Isabel Herranz, European School of Business & innovation

Isabel Herranz
European School of Business & innovation

Cutting-edge ideas like the Internet of Things and artificial intelligence ...

Giorgio Mantovani, Corman S.p.A

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Dave Rousse, INDA

Dave Rousse

INDA, the Association of the Nonwoven Fabrics Industry, serves hundreds of ...

Wendell Rodricks, Wendell Rodricks

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Rajesh Pratap Singh, Rajesh Pratap Singh

Rajesh Pratap Singh
Rajesh Pratap Singh

<div>Ace fashion designer <b>Rajesh Pratap Singh</b> has used Tencel to...

Sidharth Sinha, Sidharth Sinha

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

September 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category

Related Categories:

Advanced Search