The Punjab’s famous hosiery industry has become the latest victim of demonetisation as the cash crunch has led to a massive fall in demand of woollen apparels, compelling the manufacturers to resort to heavy discounts in a bid to clear the built-up inventory. Woollen garment makers are offering lucrative discounts starting from 20 per cent to 50 per cent in the month of December even on fresh products in the wake of lower offtake, according to industry representatives. They rued that garment makers were “forced” to offer heavy discounts in the month of December itself as against in January or February in order to meet their fixed expenses including payment of workers’ wages.
Watch: Demonetisation Badly Hits Textile Industry
“Woollen garment manufacturers have started offering discounts ranging from 20 to as high as 50 per cent in December month even on fresh makings to clear their stocks which have built up because of low demand, caused by demonetisation,” said Vinod Thapar, Chairman of Ludhiana based Knitwear Club.
Notably, discounts are generally offered in the month of January or February.
He alleged that hopes of hosiery industry to generate good sales this season were dashed after demonetisation came into effect.
“Industrialists, be it small or big, were panicked thinking that their inventory might get stuck and might not be able to clear it during this season and could cause them heavy losses,” said Thapar adding that the demand for woollen items within the state and from neighbouring states like Haryana, Jammu and Kashmir, Himachal Pradesh etc shrunk after scrapping of old notes.
Ludhiana-based prominent industrialist and maker of Shingora brand of shawls, Mridula Jain said, “The industry has been hit hard because of low demand of products.”
Jain said Shingora Shawls is also offering 20 per cent discount across the board. “We are not against demonetisation. We want the sufficient amount of liquidity of cash be made available by banks,” she said.
The troubles for hosiery came at a time when it was expecting boost in sales during winter season.
Industry representatives claimed that retails sales of woollen items including pullovers, sweaters were hit hard due to cash crunch situation.
“Industry needs cash and they need to make payments to their labour and meet running expenses,” said Ashok Jaidka, Ludhiana based woolen garment maker.
Thapar said, “With industry facing cash crunch, the production of summer garments has also been suffered.”