Surat Processing Units Slow Production As Energy, Raw Material Costs Surge
Surat’s textile processing sector is scaling down operations, with mills set to remain shut two days a week as cost pressures and supply disruptions intensify. The decision, taken unanimously by the South Gujarat Textile Processors Association (SGTPA), reflects growing stress in one of India’s largest textile manufacturing hubs.
The move is aimed at curbing production to manage rising input costs and prevent further margin erosion. With demand softening and inventories building up, operating at full capacity has become increasingly unviable. Industry players view the temporary shutdown as a corrective step to stabilise prices and align output with current market realities.
At the core of the disruption is the ongoing West Asia conflict, which has significantly impacted the supply of petrochemical based raw materials critical to Surat’s synthetic textile segment. Prices of polyester inputs and processing chemicals have surged, while constraints in gas availability, essential for energy-intensive processes such as dyeing, printing and finishing, have further strained operations. Logistics delays and rising freight costs have compounded the challenge.
Energy remains a key pressure point. The sector’s dependence on PNG, LPG and coal makes it highly vulnerable to fluctuations in fuel availability and pricing. With gas supplies tightening, units are being forced to either scale back production or absorb elevated costs, squeezing already thin margins.
Demand conditions are equally challenging. Both domestic and export markets are showing signs of slowdown, with trade disruptions affecting shipment timelines and elongating payment cycles. While exports form a smaller share of Surat’s output, they are critical for liquidity, and current uncertainties are adding to financial strain across units.
The impact is beginning to extend to the workforce as well. Surat’s textile industry, which employs lakhs of workers is witnessing early signs of labour stress. Rising living costs and reduced working days are creating concerns around worker retention and availability.
With multiple headwinds converging, industry stakeholders are seeking immediate government intervention. Key demands include a reduction in gas prices, targeted support for energy-intensive units, and policy measures to ease input costs and stabilise supply chains.
While the two-day weekly shutdown offers temporary relief, the sector remains in a fragile position. The trajectory ahead will largely depend on the duration of geopolitical tensions and the pace at which input costs and demand conditions stabilise.
