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AP traders protest over VAT affects Surat textile industry

16
Apr '12
The growing agitation by textile traders in southern Indian state of Andhra Pradesh is already showing its negative impact on the textile industry of Surat, known for manufacturing of synthetic and man-made fabrics.

Earlier this month, the Andhra Pradesh Federation of Textile Associations (APFTA) announced that wholesale, semi-retail and retail traders in the state would go on an indefinite strike from April 30, 2012 to protest against the imposition of the value-added tax (VAT) on textiles by the state government. APFTA also said that traders would stop buying textile goods from other states beginning April 15, 2012.

Immediately after the announcement, transporters in Surat stopped taking bookings and traders from Andhra Pradesh started cancelling their orders.

In September last year too, the Surat textile industry was affected due to unrest and agitation over the Telangana issue in some parts of Andhra Pradesh.

Mr. Devkishan Manghani, General Secretary - Federation of Surat Textile Traders Association, told fibre2fashion, “The textile traders in Andhra Pradesh are carrying out an agitation that they will not buy goods from Surat and other places unless the 5 percent VAT on textiles is withdrawn by the state government. As the traders refused to buy the goods from April 15 onwards, transporters stopped taking bookings for Andhra Pradesh a week earlier, thus disturbing the supply chain. This has already resulted in a loss of around Rs. 500 million worth of sales until now.”

Informing about Surat's textile products that are purchased by AP cloth merchants, he says, “Sarees is the main product supplied by Surat textile industry to Andhra Pradesh. On an average, AP traders purchase about Rs. 70-80 million worth of goods on a daily basis from Surat. Even during an off-season, there is Rs. 50 million worth of business a day with AP.”

“Sarees that are produced for Andhra Pradesh have different colours and prints compared to sarees meant for other states. It is because the sarees are given unique feel based on the tastes of the people in the region. So, a particular lot of goods produced for supplying to AP, cannot be sold in other regions, and hence the overall sales gets affected,” he explains.

Commenting further on the current situation, he says, “The AP traders are on an indefinite strike. Unless they have positive talks with their government, it is difficult to say when they will call off the strike. If the agitation continues for a longer period, it will cause huge loss to Surat's textile industry, which is already facing troubles due to rise in crude oil prices, electricity tariffs and several other factors.”

Fibre2fashion News Desk - India


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