Home Textile Indian textile grapples with cost push inflation as raw material prices surge

Indian textile grapples with cost push inflation as raw material prices surge

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Since the polyester yarn prices have been increasing rapidly, 6-8% in the past month and 12-15% in past three months resulting in an increase of cost of doing business, industrialists of Mumbai have decided to reduce their industry working shifts from three to two of 6 or 8 hours each.

Over the past one and a half year Surat textile weavers and processors have been facing cost push crisis since GST was imposed. Reduction in shift will lead to fall in fabric production and unemployment as Surat textile will have to focus on saving cost.

Managing Director Shahlon Group, Mr Dhiraj Shah mentioned the inflated crude oil prices in the past months eventuating an increase of prices of raw material required to produce polyester yarn by Surat based power looms.

The industrialists have also appealed the finance ministry to take under consideration the difference in synthetic fabric and yarn GST that is 5% and 12% respectively, because of which while selling fabric, they are unable to claim full GST and a major amount of tax credit remains unused in their books.