Gujarat’s textile industry is facing a potential production shutdown ahead of Diwali as yarn prices have increased by 40% to 45% since June. Surat’s weaving units are struggling with rising input costs, weak fabric demand and delayed payments.
The situation has put pressure on manufacturers, particularly small weaving businesses. Several units have reduced production and introduced weekly holidays to control losses. Industry representatives warn that factories may begin their Diwali break around 15 days early and remain closed for another two weeks.
Rising Costs and Weak Fabric Demand
Yarn prices have increased sharply, while grey fabric and finished textile demand remains weak. As a result, unsold inventories are growing and payment cycles are slowing. Manufacturers are also facing working capital shortages, making daily operations increasingly difficult.
Mahendra Ramoliya, director at Surat’s Sachin GIDC industrial estate, said the increase in yarn prices following the outbreak of conflict in the Middle East has disrupted the textile value chain.
He said manufacturers are producing fabric at higher costs without assurance of adequate returns. Several weaving units have already reduced their working days to limit losses.
Weavers Seek Government Intervention
Industry representatives are urging the government to monitor yarn prices and address what they describe as artificial price increases. They are also calling for domestic weavers to receive yarn at internationally competitive Free On Board (FOB) rates.
According to industry representatives, lower input costs could help ease financial pressure and improve manufacturers’ competitiveness.
The potential shutdown could affect fabric supplies, textile trade and workers dependent on Surat’s manufacturing sector. With Diwali approaching, weavers are seeking measures to address rising costs and prevent further production disruptions.
If yarn prices remain high and fabric demand does not improve, more units may reduce operations during the festive season.
