“The cost of yarn has increased by 15 percent in 2012, leading to a rise in the prices of garments too. Yarn cost is expected to increase more in 2013, thus causing further increase in the prices of garments,” said Narinder Miglani, Secretary of the Knitwear Club of Ludhiana.
“The state government has levied 12 percent excise duty on the manufacturing of yarn and garments as well. We have been demanding that the state government waive off the excise duty, but have not received any response from the government yet,” Miglani said.
“There has been a decline in the sale of woollen garments in 2012 as compared to 2011. The number of customers has reduced due to increased prices of garments,” said Rakesh Arora, a garment dealer.
“The price of yarn now ranges between Rs.240 and Rs.350 per kg. The increased prices have reduced our capacity to invest in the manufacturing of garments, further leading to a decline in our margins,” stated Sanjeev Kumar, a garment manufacturer in Ludhiana.
“We have reduced the manufacturing of garments, as fewer customers are interested in buying clothes that have been rendered expensive after the rise in yarn prices. We are expecting more customers in the middle of January, as dealers reduce the prices of garments then, considering the end of the sale season,” said Kumar.