The Sri Lankan economic crisis could “slightly” benefit Indian garment units


The economic crisis in Sri Lanka may benefit the Indian garment industry to a lesser extent, but it is the removal of import duties on cotton that could change the fate of the industry, an official says from the Tamil Nadu Exporters Group.

Tiruppur Exporters Association (TEA) Chairman Raja A. Shanmugham also said that Sri Lankan garment companies with production bases in India can fulfill their orders from their Indian units.



Sri Lanka’s production of knitwear for export was affected due to several hours of power cuts, a shortage of diesel fuel and high commodity prices.

Will there be a positive friction effect for Indian units?

“There may not be a large influx of orders for units in Tiruppur due to high cotton and yarn prices. International brands may shift their sourcing to countries like Bangladesh and Vietnam,” Shanmugham told IANS.

Hoping the central government would remove the 11% import duty on cotton, he added that some orders could be passed on to Indian garment makers as other countries may have production constraints.

He said cotton traders were raising their tariffs, due to the 11% import duty which, in turn, makes domestic garment units uncompetitive in international markets.

Shanmugham said that some Sri Lankan garment units have their production branches in India and these Sri Lankan companies can fulfill their orders from their Indian units.

Asked about the desirability of outsourcing units to Tiruppur (including 100% export-oriented units), such as the fulfillment of orders placed by Sri Lankan companies, Shanmugham said it was early to comment. that.

Tiruppur, dubbed as the knitwear capital of India, ships around Rs 32,000 crore of garments and around Rs 30,000 crore of goods for the Indian market.

While some Sri Lankan clothing orders are expected to be diverted to India, a small group of people from the island nation have sought refuge in Tamil Nadu.

According to the Tamil Nadu government, 16 Lankans (three men, five women, seven children and a four-month-old baby) have landed in Tamil Nadu due to the economic crisis in the island nation.

Sri Lankans have told authorities they are unable to buy essential items as their prices are skyrocketing and beyond their reach.

They were accommodated at Mandapam transit camp near Rameswaram in Ramanathapuram district.

Tamil Nadu Chief Minister MK Stalin has urged Prime Minister Narendra Modi to allow the state government to provide essential commodities and life-saving medicines to Sri Lankan Tamils.

This is the second time that the DMK government has tried to enter the sphere of activity of the central government.

Earlier, the DMK government announced that four DMK leaders and four bureaucrats would travel to neighboring countries of Ukraine to coordinate and bring back Indian students from the war-torn country.

(Venkatachari Jagannathan can be contacted at [email protected])

–IANS

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(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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