Surat: The textile trade in the city is witnessing a slowdown over the past couple of weeks, and there is a considerable drop in new orders. Business and industry leaders claim that amid a busy wedding season, the sudden jolt is due to Mahakumbh, as crores are visiting Prayagraj, impacting spending power as well.
The trade is further impacted due to the payment time limit under the amended Income Tax Act 43B(h), in which MSMEs’ dues are required to be cleared within a maximum of 45 days.
In 2023-24, the textile business was severely impacted in the last quarter due to payment time limit.
Though the confusion this year is less due to the payment time limit rules, there is a combined effect. According to various associations of traders, three months ago it was declared that the marriage season will be a busy period, but in the last two weeks, the orders have dropped.
“There was a shortage of labour two weeks ago, but now processors do not have enough orders. Two factors are impacting the textile industry in the city. Mahakumbh and the payment time limit for MSMEs both have applied brakes on new orders,” said Jitendra Vakharia, president, South Gujarat Textile Processors Association (SGTPA).
Leading textile processors claimed that due to good orders in the last few months, overproduction started, and now supply is higher compared to demand.
“As per an estimate, around 40 crore people are visiting Mahakumbh, and it is one of the main reasons for the sudden impact in the market. It will recover in 15 days’ time, but there is an effect since a large number of people are busy with this event,” said Kailash Hakim, president, Federation of Surat Trade and Textile Associations (FOSTTA).
Traders also consider how people are spending more on travelling to Prayagraj, which has impacted their buying capacity for textile products. “From traders to retail customers, around 40 crore people are visiting Kumbh. So a considerable amount is being spent on the tour and other expenses at Kumbh. Further, the payment time limit issues have started surfacing, and bulk buyers from other states have stopped placing new orders,” said Narendra Saboo, president, Surat Mercantile Association (SMA).
