Effects Of Chennai Flood On Indian Textile Industry

The recent flooding in the city of Chennai has had an adverse impact on a large number of both residential as well as commercial projects in and around the city. And the humongous loss of functionality as well as property also enveloped the textile industry of the area. Pertaining to the rains, even the festive sales for Christmas have taken a hit, thus worsening the already grim situation.

While the city is moving back to its normal functioning, due to the plunge in sales, order worth an estimated amount of Rs. 500 crores have been cancelled. Since a large majority of these orders are fulfilled by the textile sector of Surat in Gujarat, businesses in the state are facing a difficult situation. Surat is known to supply textiles, and apparels worth Rs. 110 crores to the markets of southern India on a day-to-day basis, of which only materials worth Rs. 30 crores are currently being supplied bringing down the supplies to a meagre 20%. These materials include sarees, home textiles as well as dress materials.

Mr.Devkishan Manghani, the Director of Southern Gujarat Chamber of Commerce and Industry, recently informed that Chennai, Hyderabad, Rajahmundry, Bangalore, Kozhikode, Thrissur, Vijaywada, Kochi and Cuddalore are some of the most important textile centres, where materials are consistently supplied by the Surat’s textile industry. He also stated that during this quarter of the year, the demands from the northern part of India are almost negligible and hence the dependence on the southern market increases significantly. But attributing to the heavy rains, the coming three months would be rather hard on Surat’stextile sector.

The Director of the Federation of Surat Textile Trader Association, Mr.Champalal Bothra said that Tamil Nadu is one of the largest markets for the textile industry of Surat, but a large majority of the goods dispatched to the area have either be returned or reportedly been lost in transit. The total losses incurred in transit haven’t been calculated as of now. The situation has been aggravated by the delay in payments, which have caused a huge disruption in the turnover cycle.

Moreover, a lot of workers coming from the state of Andhra Pradesh and Tamil Nadu work for the textile industry of Surat. Due to the situation created by the floods, the workers haven’t been able to resume work, thus hampering the production as well as the sales, thereby contributing to further adversity in terms of the overall business.

Noted textile manufacturer and retailer, Mr. S Sivakumar, MD, RmKV informed that a large number of textile units in Tamil Nadu are now shut. In fact, manufacturing units is certain nearing districts of Chennai, such as Kanchipuram and Aarani have been standing shut for the past one month, amounting to a loss of an estimated 1 to 1.5 lakhs of sarees.

The adverse impact has also extended to the city of Agra, where manufacturing of footwear and other leather products have taken a severe hit, owing to the fact that over 60% of the leather used in the industry comes from Chennai. The lag in export supply has resulted in paramount losses that are estimated to be anywhere between 150-200 crores of rupees. Another overbearing factor is that humidity caused due to the incessant rains has deterred the quality of leather, thus furthering the blow for the manufacturers.

Given the negative factors that are looming over the overall textile industry of India, it is hard to determine as to when normal functioning will finally resume.