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Rise in the prices of cotton may have come as good news for growers and traders but it has severely impacted the manufacturing units of jeans and cotton trousers in Bellary, which is also one of the country's main hubs for the industry.
Several units have been forced to slow down production because of lower volumes directly affecting a large number of daily wage earners dependent on these garment manufacturing units.
?The small players in the industry have already been facing the brunt due to the increase in the prices of raw denim by 30-40 per cent. As such, the gap between the investment and procurement of raw denim is getting bigger. As a result, the units are unable to meet the capital requirement resulting in business volumes coming down,? Mr Sankalchand Kawad, a leading manufacturer of jeans and cotton trousers, told Business Line .
There are over 200 garment manufacturing units in Bellary. In addition, there are several stitching units working on contract/piece-wise basis. According to one estimate, around 10,000 labourers are engaged on daily wage basis for various types of works such as packing and labelling.
Mr Sankalchand also pointed out that because of the rise in prices of essential commodities, clothing has been pushed to the bottom of the must-have list. Hence, the price rise of cotton, coupled with lower demand for jeans, is turning out to be a double whammy for the manufacturing industry.
The Bellary Garment Manufacturers' Association Secretary, Mr Lucky Shah, said about 90 per cent of the units are dependent upon the mid-segment of the society. ?Although we use branded denim, the price of our product is less compared with the branded products because of low labour and other material cost. Now, with the increase in the raw material cost, we are forced to procure less material. This, in turn, would bring down the production and affect the business as well as workers dependent upon the industry,? he said.
He also feared that because of the situation, several small units face the threat of closure.
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