The delay in reopening Tirupur's dyeing units may lead to knitwear and apparel exporters shifting base to Ludhiana, Ahmedabad, Mumbai, Kolkata and Delhi.
The Madras High Court, on January 28, passed the closure order on over 800 dyeing and bleaching units in the contempt petition filed by Noyyal River Ayacutdars (farmers) Protection Association for not following the December 22, 2006 directives of a Division Bench on effluent treatment.
Mr Premal Udani, Chairman, Apparel Export Promotion Council, said business worth $3.5-4 billion may shift to North India if the delay in finding a quick solution persists.
The hosiery town accounts for nearly 38 per cent of the country's total apparel exports of $10.5 billion.
“Most knitwear and hosiery units may shift their base to north India as they are already facing a huge power and labour shortage. This may also lead to large scale loan defaults with banks and other agencies,” said a textile analyst.
“While we welcome the High Court concern over pollution caused by the dyeing units, it is not desirable to implement a blanket ban on all units as over three lakh jobs are at stake,” said Mr Udani.
The judgment has come at a time when the textile industry plans to capture a major chunk of China's export orders worth $150 billion a year. The sector has, however, been bogged down by a huge labour shortage. “The labour-intensive textile business in China has been hit as most workers prefer working in malls and hotels to factories,” said Mr Udani.
The country's apparel exports would go up by $7.5 billion or 50 per cent even if it grabs just five per cent of China's export orders. However, high yarn prices and imminent closure of Tirupur's dyeing units may hinder exporters from executing orders on time, he added.
Apparel exports touched the highest-ever mark of $944 million in December after registering a drop of four per cent at $710 million in November. The industry, which has clocked exports of $7.6 billion till December, expects to cross the $11-billion mark this fiscal, up from $10.5 billion last year.