How can India replicate the success of Tiruppur in 75 other places?

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July 02, 2022 Located nearly 500 kilometres to the southwest of Chennai, Tiruppur is India’s largest knitwear hub. The cluster pretty much came up on its own in what was once an agricultural town. The farmers there started with small textile units during the 1970s. The coming years saw a web of small to mid-sized units crop up in this little Tamil Nadu town, with none of the fabrication, processing, and stitching work being done in any one single place. It became a network of firms that relied on job working, contracting and sourcing arrangements.

Today, Tiruppur exports cotton and cotton-blend T-shirts, dresses, sweatshirts, and other knitted clothes to the US, Europe, Australia and Canada.


What is the place like? Odour of chemicals and dyes used in fabrics greet you as you enter Tiruppur. And, at least one person from almost every family is connected to its textile and garment industry. Tiruppur is home to 10,000 garment manufacturing hubs, employing over 600,000 workers who make hosiery, knitwear, casual wear and sportswear.

There are various estimates that highlight the hub’s importance. Tiruppur contributed 54.2 per cent of India’s textile exports in FY22. According to Tiruppur Exporters’ Association President Raja M Shanmugham, out of India’s total FY22 exports of around 480 billion dollars, Tiruppur alone accounted for a 1.07% per cent share.

The numbers explain why the government is keen on setting up 75 Tiruppur-like textile hubs in different parts of the country. Shanmugham believes that as the first step towards this goal, the government must bridge the disconnect between the industry and decision-makers.

He also says that structural changes are needed to give a boost to what he calls “happening” locations, such as Tiruppur for knitwear, Karur for home textiles, Ichalkaranji and Bhilwara for woven fabrics, and Bhadohi and Kashmir for carpets. Shanmugham says that greater representation is needed because the industry is largely made up of micro, small and medium units. And also because it would enable fast policy interventions, which is an area where competitor Bangladesh has been more agile than India.

The interest in Tiruppur comes at a time when the prices of cotton and yarn have gone up, forcing factories there to work at reduced capacity, leaving wholesale shops with hardly any takers for clothes. According to industry data from a previous Business Standard report, yarn prices have increased by 112 per cent from June 2021 to June 2022. According to the Tiruppur Exporter’s Association, the price of cotton per candy, that is 356 kg, has increased from Rs 37,000 in June 2020 to Rs 97,500 at the beginning of June 2022. So, Tiruppur's wholesale market is seeing a dip of 30 per cent in sales.



Over the last few years, the government has also rolled out export-boosting schemes such as Rebate of State and Central Taxes and Levies on Export of Garments and Made-ups (RosCTL) and Remissions of Duties and Taxes on Exported Products (RoDTEP).

The government had last year rolled out a PLI scheme to expand the man-made fabrics and technical textile segment’s value chain. The government is also in the process of devising the second edition of the textile sector PLI scheme, with a focus on the apparel segment. The success of these initiatives is critical because the textiles industry directly employs 45 million people and accounts for 100 million jobs in allied industries. But, will the government be able to bridge the gap between the small units of Tiruppur and the corridors of power to achieve success?


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