COVID-19 Update

Surat: Silence of the looms

Print edition : July 31, 2020

Corporation officials and policemen stand guard outside the Surat Textile Market, which was sealed a following spike in COVID-19 cases, on July 6. Photo: PTI

A combination of labour shortage, liquidity crunch and absence of demand seems to be spelling doom for Surat’s textile trade, until recently an economic powerhouse.

The first blow was demonetisation; then came the Goods and Services Tax (GST); and now the COVID-19 crisis seems to be the final blow. Surat, known as India’s cloth city, was somehow able to limp back to health after the first two. But the third looks like one that may drive the thriving textile hub to a point to no return.

Surat’s powerloom sector, which accounts for as much as 80 per cent of the country’s man-made fibre production and almost 100 per cent production of synthetic sarees and dress materials, has been able to resume just 10 per cent of its usual capacity since the lifting of lockdown curbs. From conversations with textile traders and industry associations in the city, Frontline identified the two prime reasons for the strain in the textile market: shortage of manpower caused by the exodus of migrant workers and the State government’s flip-flops on rules and regulations regarding the industry's operations during the COVID crisis.

Surat’s Rs.50,000-crore powerloom and textile units are among the highest employment and revenue generators in the country. After agriculture, it is considered the second most important economic activity. Industry experts say that if this sector is struggling, it means the larger economy is also in trouble. The current crisis calls for two corrective steps: a boost for small businesses after a three-month lockdown and, more importantly, labour policies recognising that migrant labour is the backbone of this industry.

In an appeal to the Union Ministry of Textiles in May, the Federation of Surat Textile Traders Association demanded that textile traders be put into the MSME (micro, small, medium scale enterprise) category. They are not categorised as MSME mainly because they are not considered manufacturers. However, in view of the hardships caused by the COVID crisis, the Central government included textile traders (with conditions) in the Rs.3 lakh crore MSME revival package announced in May.

Textile association leaders say this move will provide them temporary liquidity. But it is not part of any long-term policy. They say that this is a good time for a policy review by the Central government, with particular attention to Surat. Repeated representations have been made over the years for a change of policy, but nothing has come of them. Surat’s textile traders are unique in that they function as weavers, dyers, embroiderers, printers and traders. A single company can sometimes handle the entire production/manufacturing line. Yet they remain traders by definition and therefore their businesses do not qualify as MSMEs.

Rakesh Kunjwani, the owner of Neelam fabrics in Millennium market, said: “In early June, the government permitted the opening of many multi-storeyed textile market buildings. Yet, each time a COVID-19 positive case is detected, they seal the building, which means at least 5,000 shops have to stay shut. Opening and closing shops often is causing inconsistency. We cannot do business like this.”

Shortage of labour

Kunjwani said that very few workers had stayed back and many units were making do with unskilled local labour just to finish off the stock of fibre that could rot during the monsoon. “Our businesses are running not even up to 10 per cent of our capacity. We are small businesses with an average annual turnover of Rs.5 crore. At this time, just before the festival season begins, we usually struggle to keep up with consignments.”

Surat deals primarily in man-made fibre (MMF). There are 185 towers located on a 1.5-km stretch of its arterial ring road. Each building has an average of 5,000 to 7,000 shops with 65,000 registered traders. The tremendous activity that in normal times unfolds daily in these shops is a mark of the city’s staggering scale of business.

Kunjwani says that the once bustling textile markets—that had thousands of workers involved in hectic activity, packaging, cutting, lifting—now wear a desolate look. The colourful bales of fabric, the sound of tempos, labourers carrying heavy material shouting to get others out of the way, are all missing. “I hardly see 20 people when I walk to my shop. Obviously, it will take time, but without labour we are facing a bleak future,” he said.

Champalal Bothra, general secretary of the Federation of Surat Textile Traders Association (FOSTTA), estimated that production was currently at 10 per cent of full capacity. At its peak, Surat produces four crore metres of fabric a day. The daily turnover is pegged at Rs.150 crore. The textile city houses seven lakh looms, 1.10 lakh embroidery machines and nine industrial estates that have thousands of weaving, dyeing and printing mills.

Businesses in Surat operate on long-term credit and consignment basis. FOSTTA estimates that Rs.5,000 crore is stuck in credit, and the liquidity crunch naturally means there is little capital to start work with. Another concern is the paucity of raw material caused by the lockdown. A combination of labour shortage, liquidity crunch and absence of demand was spelling doom for the industry, Bothra said.

Bothra explained that Surat’s textile industry was multi-layered employing approximately 14 lakh workers—80 per cent of them migrants from Chhattisgarh, Bihar, Uttar Pradesh, Madhya Pradesh and Rajasthan. They work in the loom units—dyeing and processing, embroidery, cutting, tailoring, packaging and transportation. Around three lakh women work from home, doing small embroidery jobs. “Unless the workers return, the industry cannot resume,” Bothra said. “We have heard contractors are sending buses for labour. Until now I have not seen any visible signs of people returning.”

With Surat turning into a COVID hotspot, it is unlikely workers will even want to return soon. Besides, the State government is not encouraging “reverse migration” out of the fear that movements across State borders may lead to a surge in infections. Bothra said people would not be coming back until the trains started running again.

No capital, no material

The weavers, who are drained of working capital, do not have fresh material. Also, as Bharat Gandhi, chairman, Federation of Indian Art Silk Weaving Industry, pointed out, demand is much reduced. “What was once considered a necessity is now being seen as a luxury. People will still need clothes and fabric, but we predict the demand for fashion goods will reduce substantially,” he said.

Montu Jain, a trader in J.J. Market, said: “It is a critical situation which is getting worse. We work on long-term credit and on a consignment basis. We are mostly small businesses. If the situation does not improve many units will shut down. We have to learn to live with the virus and continue working. If we followed proper hygiene protocols strictly enforced by the state, the markets would have resumed.”

He also explained that physical distancing was hard to maintain in this industry because the shops were small, usually measuring 10 feet by 10 feet. Workers work crowded together in the corridors sorting and packing material. But he felt that practical working protocols could be worked out: workers might work in shifts and material could be sent directly for printing.

Jain said that Surat traders would need to innovate and reinvent themselves in a situation marked by poor demand and lack of export opportunities. “Business has to be approached differently. For instance, units have begun making material for PPEs (personal protection equipment), textile for masks and other medical requirements,” he said.

In its appeal to the centre, FOSTTA sought support mechanisms to get the industry back on its feet. They asked for interest waivers, reduction of GST on certain items, Mudra loans for traders, a two-year freeze on MMF imports, a cargo terminal to encourage exports, and a skill development programme for women.

Reverse migration

According to industry reports, close to 35 lakh migrants left Surat and its surrounding industrial zones in April and May. Initially, migrants were reassured by their employers that work would resume and the companies would look after them. However, as the lockdown kept getting extended, the situation deteriorated and the migrants started heading back home. Eyewitnesses say that in the initial weeks of the lockdown, Surat saw tragic scenes of thousands of workers wandering in the streets without food or shelter. The government set up food camps, but the numbers were overwhelming, and the larger problem of workers wanting to return to their villages was not solved.

On two occasions, workers came out on to the streets demanding that arrangements should be made for them to travel home, and their protests turned violent. This finally forced the State and Central governments to act. “Shramik” trains carried back lakhs of migrants to their villages. Although the State says talks have begun with the northern States about sending trains for a reverse migration, social workers who helped migrants return believe it will take time. One of them said: “The trauma many suffered in getting back would have scarred them. I saw people with bleeding feet walking on the highway. How will they trust the State again? Besides, what if there is a second wave and another lockdown is declared? The sad reality is that they will eventually return because opportunities are scarce in their home States. Until that happens, Gujarat will pay the price for neglecting them in their time of need.”

Habibullah Mehmood Ansari, a zari (gold embroidery) worker from East Champaran in Bihar, had to be coaxed into recounting his painful experience: “I got onto a train after paying Rs.1,500. That was the last of my salary. I had no money when I reached home. Now I am looking for agriculture and MNREGA [Mahatma Gandhi National Rural Employment Guarantee Act] work. If I do not get work, I might have to come back to Surat, but not for now. I prefer to be in my village.” Asked whether labour contractors had approached him, Ansari said someone did call but he was not interested.

A letter from the Editor


Dear reader,

The COVID-19-induced lockdown and the absolute necessity for human beings to maintain a physical distance from one another in order to contain the pandemic has changed our lives in unimaginable ways. The print medium all over the world is no exception.

As the distribution of printed copies is unlikely to resume any time soon, Frontline will come to you only through the digital platform until the return of normality. The resources needed to keep up the good work that Frontline has been doing for the past 35 years and more are immense. It is a long journey indeed. Readers who have been part of this journey are our source of strength.

Subscribing to the online edition, I am confident, will make it mutually beneficial.

Sincerely,

R. Vijaya Sankar

Editor, Frontline

Support Quality Journalism
This article is closed for comments.
Please Email the Editor