Workers’ ‘Diwali’ leave may hit garment exports from Tirupur industrial hub

The anticipated long leave by the workers of knitwear/readymade garment exporting units at Tirupur to celebrate Diwali festival, will have a cascading effect on the production as well on the working capital.

The Tirupur Exporters’ Association (TEA), which houses thousands of garment units, is likely to witness a production loss of anywhere between Rs 700 crore to Rs 800 crore due to extended leaves to be availed by the workers, which is a common phenomenon at the knitwear capital of India.

Since majority of the workforce across thousands of units at Tirupur is from northern part of the country, it is anticipated that over 200,000 employees will be on leave for at least 10 to 15 days at a stretch as against normal 3 to 4 days, and hence the association sees a huge production loss, a senior official of TEA said.

This assumes significance at a time when the readymade/knitwear industry is witnessing a positive trend after months of degrowth in exports. With their pre-commitments on export obligation coupled with the onset of new orders owing to ensuing winter season, the export units fear cancellation of orders due to delivery schedule.

Alarmed over the inevitable impact, TEA, at its executive committee meeting, discussed the impact of long leave taken by employees after Diwali and its impact on delivery schedule, which may lead to cancellation of orders and have a cascading effect on working capital and other financial stress.

According to a senior official of TEA, if workers extend their leave beyond what has been in practice over the years, the association will end up with a production loss of anywhere between Rs 700 crore to Rs 800 crore.

We expect over 200,000 workers to go on leave to celebrate Diwali festival during the weekend, he added.

According to him, after months of degrowth, the industry is now looking up. It is impossible to send all the cargos through air as it cost 8 to 10 times more than that of shipping, which is in usual practice. There are huge committed orders and need to meet the delivery schedule or otherwise will end up in losing orders, he added.

According to Raja M Shanmugham, president TEA, these factors will be advantageous for competing countries at a time when we have been struggling to withstand the onslaught of their competition.