Chennai apparel units face hard times

Apparel export units in Chennai globally famous for their

woven men’s wear, including the famous Madras Checks are facing strong 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. The going is far from good for the remaining 100-odd units which have cut production by as much as two-third, in the last few years.

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.

According to Prakash C Sacheti, Vice President of the Association, 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. Though a few units also tried to float their own domestic labels to battle the situation, it has not helped much to better the situation.

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 retailers 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.