European apparel brands have slashed garment offtake from Tirupur and Noida by up to 25 percent as they cut discretionary expenses due to the uncertainty in the region about the fallout of the Russia-Ukraine war.
As all the big global brands have closed shutters in Russia, the order flow from Europe has dwindled. Tirupur exporters fear that in FY23 exports may come down by 20%-25% if this trend continues. The garment hub annually exports Rs 35,000 crore worth of goods.
“It is not that the European buyers are not placing orders. But the volumes have come down. Also, yarn prices have gone up by 110 percent since 2020. The buyers have already absorbed the increase in prices by two to three times,” said Raja Shanmugam, President, Tirupur Exporters Association (TEA).
High yarn price is posing a problem to the garment manufacturing units in Tirupur. “Most of them are MSMEs. Since the yarn prices have gone up, delivering goods on time is becoming difficult. But the foreign buyers rely on India because of the stability in the country.” Tirupur houses 2,000 knitwear garment export units and another 18,000 ancillary units that are suppliers to the knitwear units.
TEA president Shanmugam added that the units have given a closure call on 16th and 17th May protesting the rising yarn prices.