First, there is the disruption caused by Holi, a spring festival that is Hindu in origin but also widely celebrated by non-Hindus as well. Traditionally, factory workers take vacation for Holi and return to work by the first week of April. However, many workers, intending to vote in the upcoming general elections, are not likely to return to work until sometime in May.
Rakesh Choudhary, executive director of South Gujarat Textile Exporters Association, said, “Production is already down by 30-40 per cent. More than 200,000 workers have gone on leave for Holi. But this year is different. With general elections coming up, workers have hinted they won’t return before May since they want to stay back for voting.”
In addition to Holi and the elections, April is also the wedding season, which is likely to delay workers’ return to work even more. The total workforce in Surat numbers more than a million factory laborers and many expect nearly half of them to be absent for a prolonged period. The timing couldn’t be worse since the sector is in the midst of fulfilling heavy orders for the summer season. According to Devkishan Manghani, general secretary of the Federation of Surat Textile Traders Association, somewhere between 20 percent and 30 percent of the region’s workers have already left their factory posts.
India has lately emerged as a major textile producer. Its most impressive success is being reported by its yarn and garment manufacturing companies, which are experiencing revenue growth as high as 53 percent in the last year. Much of this pace can be attributed to India’s perception as an alternative to China, which continues to become increasingly expensive, and Bangladesh, which remains cheap but politically perilous. One important factor contributing to India’s recent vigor is also the burgeoning domestic demand in China, which imports about 30 percent of India’s cotton yarn. As a consequence of China’s complex quota system regarding cotton, many of its companies find its importation more attractive than either buying it local or producing it themselves. China’s unusual government regulations, and its swelling demand, redound to the benefit of India, which is well-positioned to take advantage of both factors.
Blessed with a enormous workforce of young, deeply discounted and currently underemployed labor, India has unlimited promise. However, it has historically struggled to keep apace with China and Bangladesh, the region’s dominant players. For a nation of its dizzying size, its $32 billion worth of textile exports last year is an underachieving number. It can’t yet hope to reach China’s $260 billion yet, but comparatively tiny Bangladesh took in $21 billion in the same period.
India’s exports are expected to leap 30 percent over the next year, coming in close to $44 billion. The government has been revising its cumbersome oversight rules, erasing a limitation on how much money could be invested in garment factories. On the other side of the coin, their labor laws have become impressively more stringent.
Some are banking on the hope that the labor shortage is mitigated by a shift in production to larger factories that still have open capacity to fulfill new orders. Choudhary said, “While small units have curtailed their production by almost 50 per cent, big units are running overtime to make up on the shortage by paying extra to the remnant workers.”