The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has stated that the manmade fibre sector has been adversely hit by demonetisation.
According to the SRTEPC, a severe liquidity crunch has hit weavers, textile processors as well as traders due to which trade has dwindled to virtually ‘zero’, especially due to poor demand for fabrics and cloth from consumers.
These were the conclusions arrived at by SRTEPC delegates as well as 17 other export promotion councils across India at a recent meeting organised in Delhi by the union government to get feedback about the impact of demonetisation.
In its presentation on the impact of demonetisation on the textile sector, it was pointed out that the manmade fabric sector is facing a dire situation and is almost on the verge of collapse.
It was stated that merely 30 per cent of textile units are operational, whereas the rest have already shut down due to the impact of demonetisation.
Expressing concern about the situation, the SRTEPC has stated that except spinning units, most of yarn preparatory, texturising, sizing, twisting, warping, weaving, processing and embroidery units have been paying workers in cash.
Since paying wages to workers has been a hit after demonetisation, the SRTEPC has demanded that owners of such units should cash in newly issued currency.
The textile industry body has stated that there is no demand in the market whether it is from textile manufacturers to wholesalers to retailers or consumers.
The liquidity crunch caused due to demonetisation has led to the closure of 80 per cent of textile processing units, even as weavers have been forced to operate eight hours a day, while almost 90 per cent of embroidery and knitting units have shut down, the SRTEPC stated.