If Tirupur was growing at 30 per cent every year, the exporters too were growing at an annual rate of 20-25 per cent. Then recession hit the global economy and exports earnings to the tune of Rs 11,000 crore in 2007 dropped to Rs 9,500 crore (Rs 95 billion) the next year, a drop of more than 10 per cent. Almost 40 per cent of Tirupur's exports are to the US, 30 per cent to Europe and the rest to other parts of the world.
Unlike the fashion-conscious European market, the US market is voluminous and imports cheap garments in millions of units. However, the margin from the European market is double that of the US market. Buying agent Balraj says that the US market is as big as Europe and the United Kingdom together.
With exports dropping, many a textile unit in Tirupur started to gasp for survival. Thousands of people lost their jobs and returned to their native places. Those who decided to remain had to work on sharply reduced salaries, and production was down in many units by almost half.
There is unanimity in the opinion is that units that suffered the most were the companies that exported only to the US as compared to those who had European customers.
No comments:
Post a Comment