Why the Kashmir situation is bothering Amritsar’s textile industry

Countless manufacturing units in the once-thriving textile sector lie idle today, and 80% of the two lakh people directly and indirectly employed by the industry have returned home. The Kashmir clampdown may not be the only reason, but is making matters worse for sure.

The clampdown in Kashmir following abrogation of Article 370 has adversely impacted the traditional textile industry in the holy city of Amritsar. Kashmir used to be a major market for Amritsar’s woven textiles, especially the tweeds which are used for making phiran, the long cloak like dress worn by men and women in Kashmir. Moreover, Amritsar’s shawls and stoles have a big market in the valley, which was virtually cut off from the rest of the country till recently.

The recent restoration of communication through post-paid mobile phones and opening of roads has provided some relief but the loss in business is perceptible. Normally, most of the stock used to get cleared in autumn itself, the busiest time for Amritsar’s weaving units and traders. This year, the markets have started to pick up only now.

“The shawl trade is dominated by Kashmiris,” Said P L Seth, General Secretary, Shawl Club India. “So much so that shawls manufactured anywhere are sold as Kashmiri shawls. A major part of the turnover of this sector is in the hands of Kashmiris who have a large network and are the backbone of the shawl industry. However, unlike other years when the Diwali sales started one month before the festival, this year it picked up only one week before the festival.”

Kashmir has also been a major market for the blended wool and recycled wool produced in Amritsar’s weaving clusters. “The current situation in Kashmir has had a major impact on the units in the city catering to that market,” said Gunbir Singh, an erstwhile textile unit owner who now runs an NGO, the Dilbir Foundation. Manufacturers and traders have experienced severe delays in payments due to the clampdown and are not able to make their usual rounds of the valley to conduct business. “However, the scenario is inching towards normalcy,” says Seth.

Coping with the downturn

Amritsar presently has over 500 shuttle less looms in the weaving segment. “Shawls and stoles woven in Amritsar are a part of the heritage of the city and are famous the world over,” said Seth, who was among the first to upgrade to shuttle less looms in 2002. As per figures provided by the General Manager of the Amritsar District Industries Centre, Balwinder Pal Singh, the weaving segment saw a peak turnover of Rs 10,000 crores during good times.

“Amritsar dominates the shawl and stole market throughout the country,” said Balwinder. “The turnover, however, has gone down quite a bit at present”. The price of shawls made in Amritsar here range from Rs 900 for a blended product to over Rs 1 lakh for premium products, including fine wool and pashmina shawls.

Before partition, Amritsar, along with Lahore, was a major centre for tourism, textiles, handlooms, rice mills, and as a trading centre. The blankets, mink blankets, shawls, and tweeds manufactured in the city are well known in the sub-continent and beyond. Along with Surat, the city has been at the forefront producing cloth for ladies suits, sarees, shirts, dupattas, lehangas, dress material and other items at its warp knitting units.

However, the industrial scenario, especially the textile sector does not look too rosy at present. The city has over 450 warp knitting units, which have hit rock bottom in recent years. “Over 370 units are not functional at present,” said Krishan Kumar Kuku, a leading warp knitting manufacturer and industry representative, who was forced to shut down one of his two units and is operating the other one at 25 per cent capacity. “Only 10 to 15 per cent units are operational and these too are working at 20 to 25 per cent of their capacity,” said

The sudden drop in business has led to a majority of textile unit owners dabbling in other segment like real estate and tourism to tide over the tough times. Says Balwinder Pal Singh, “The weaving units are doing some business, otherwise the entire sector is down in the dumps,” said Balwinder Pal Singh. “There is recession in the market, there is no demand. Earlier production used to go on throughout the year, but now it has turned seasonal. About 80 per cent of the installed capacity is lying idle”.

Not so long ago, Amritsar had 125 processing units engaged in dyeing, embroidery, knitting and other textile work. Presently, only 35 of these are operational. Industry sources say that of the two lakh people directly and indirectly employed by the textile industry in the city, 80 per cent have had to return to their homes in UP and Bihar.

The sector has witnessed a major slump especially in the past one year. “First demonetisation, then GST, and now frequent changes in policy without a comprehensive strategy has bought the textile sector to its knees,” said K K Kuku. “Amritsar has been particularly affected because the city lies in the border belt, at the tail end of the country, which means that the overall industrial slowdown has impacted us even more than other places”. High price of raw materials, mainly man-made yarns and viscose yarns is one reason for the sector’s downslide.

The way forward

The decline in Amritsar’s traditional textile industry can be traced back to the 1980s, the dark period in Punjab’s history when the state was in the grip of militancy. Being a border city, Amritsar was deeply impacted by terrorism. “We suffered greatly during that time,” said Gunbir Singh. “In my opinion, the industry is still to emerge from the downturn caused during that period of turmoil. The government has not supported us in any way”.

Punjab being an agrarian state, the high cost of land is another factor that has hampered industrial progress in Amritsar. The land cost is far more than the five per cent of the total project cost ideally needed to set up a manufacturing unit. More than the inaction of the state government, the industry here blames the lackadaisical attitude of the Union Government for the present state of affairs. “We were promised a comprehensive textile policy in 2016,” said Seth. “But till date that has not happened. Smaller countries like Vietnam, Sri Lanka and Bangladesh have taken the lead over us in this segment”.

For better times ahead, the textile sector hopes for a number of things: the establishment of an institute for MSMEs, a special economic package for border areas, a comprehensive textile policy, a convention centre, and easy availability of raw material at competitive rates.

Keeping the economy alive

Under the prevailing circumstances, however, it is not surprising that tourism has emerged as the mainstay of Amritsar’s economy today. Home to the Golden Temple, the highest temporal seat of the Sikhs, the city gets around 80,000 to 1 lakh visitors per day. The numbers double during important festivals such as Baisakhi and Gurpurab.

The city has an international airport at Rajasansi, and presence of major hospitality chains facilitating tourism. Jallianwala Bagh, where General Dyer massacred hundreds of civilians on April 13, 1919 too has emerged as an important tourist spot. An upshot of the burgeoning tourist trade is the business it brings to the textile traders and manufacturers of other Amritsar specialties including papad, wadiyan, chess sets, and footwear to name a few.

But the city’s industry still requires the full opening up of Kashmir and some government concessions to make its products competitive in terms of price and quality all over the country and abroad. But policy making is hampered by the fact that the industries department has no data on the size or shape or expanse of the city’s textile sector, as an apologetic general manager of the department admitted.

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