How can India replicate Tiruppur’s success in 75 other places?
Located nearly 500 kilometers southwest of Chennai, Tirupur is India’s largest knitwear center. The cluster pretty much grew on its own in a former agricultural town. Farmers there started small textile businesses in the 1970s. In the coming years, a network of small to medium sized units emerged in this small town in Tamil Nadu without the manufacturing, processing and sewing activities being carried out in a single location. It became a network of firms based on contract work, contracting and sourcing agreements.
Today, Tirumpur exports t-shirts, dresses, sweatshirts and other cotton and cotton blend knitwear to the United States, Europe, Australia and Canada.
How is the place The smell of chemicals and dyes used in fabrics greets you as you enter Tirupur. And almost every family has at least one person associated with the textile and clothing industry. There are 10,000 garment manufacturing centers in Tirumpur employing over 600,000 workers to produce hosiery, knitwear, casual wear and sportswear.
There are various estimates that underscore the importance of the hub. Tirumpur contributed 54.2 percent to India’s textile exports in FY22. According to Tiruppur Exporters’ Association President Raja M. Shanmugham, Tiruppur alone accounted for 1.07 percent of India’s total exports in FY22 of around $480 billion.
The numbers explain why the government is interested in establishing 75 Tiruppur-like textile centers in different parts of the country. Shanmugham believes that as a first step towards this goal, government must bridge the gap between industry and decision-makers.
He also says structural changes are needed to give a boost to what he calls “hip” locations like Tiruppur for knitwear, Karur for home textiles, Ichalkaranji and Bhilwara for woven fabrics, and Bhadohi and Kashmir for carpets. Shanmugham says greater representation is needed as the industry is largely made up of micro, small and medium-sized entities. And also because it would allow rapid political intervention, an area where competitor Bangladesh was more agile than India.
Interest in Tirumpur comes at a time when cotton and yarn prices have risen and factories there are being forced to operate at reduced capacity, leaving wholesale shops with few buyers for clothing. According to industry data from a previous business standard According to reports, yarn prices increased by 112 percent from June 2021 to June 2022. According to the Tiruppur Exporters’ Association, the price of cotton per candy, which is 356 kg, has increased from Rs. 37,000 in June 2020 to Rs. 97,500 at the beginning of June 2022. So, the wholesale market of Tiruppur sees a 30 percent drop in sales.
In recent years, the government has also introduced programs to promote exports, such as
The government introduced a PLI program last year to expand the value chain of the artificial fabrics and technical textiles segment. The government is also in the process of developing the second edition of the PLI program for the textile sector, with a focus on the apparel segment. The success of these initiatives is critical as the textile industry directly employs 45 million people and accounts for 100 million jobs in related industries. But will the government be able to bridge the gap between the small units of Tiruppur and the corridors of power to succeed?