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Surat Sees Severe Recession due to GST, Chinese Imports

Surat, the largest hub for both textiles and diamonds in India, is facing severe recession, as the demand has plummeted. China continues to be a scourge for the textile industry of Surat as its products are eating away the latter’s market share. A major issue faced by the textile sector is lack of liquidity as payments are delayed by more than 100 days, claims Purshottam Agrawal, Joint Secretary, Federation of Surat Textile Traders Association.

Surat, the largest hub for both textiles and diamonds in India, is facing severe recession, as the demand has plummeted. China continues to be a scourge for the textile industry of Surat as its products are eating away the latter’s market share.

A major issue faced by the textile sector is lack of liquidity as payments are delayed by more than 100 days, claims Purshottam Agrawal, Joint Secretary, Federation of Surat Textile Traders Association.

Ashok Jeerawala, president of the Federation of Gujarat Weaver’s Association in Surat claims that this year’s Diwali is severely hit by the economy.According to Ashok Jeerawala, the government did impose a 20 percent anti-dumping duty on Chinese imports, yet China managed to circumvent Indian laws and taxes.

“This year since the beginning – from Pongal which comes around 14 January – our business fell by 50 percent, followed by wedding season which again saw a 50 percent drop, followed by Eid, Gauri Ganesh, Durga Puja etc. All festive seasons including Rakhi, Savan even Navratri, everything has been down”, said Ragnath Sarda, President, Federation of Surat Textile Traders Association.

Ragnath Sarda, President of Federation of Surat Textile Traders Association, said, “We haven’t received payment on the clothes that we sold there earlier, because they are in no position to open showrooms and sell the product. To top it off they have not purchased anything for Diwali.”

It’s been two years since GST was introduced, but the textile sector still has issues with the tax regime as they claim that it has drastically affected their revenue.

“Our revenues are down by 50 percent when compared to last year. When GST was implemented, we saw a 25 percent fall but this time the recession has pushed us down to 50 percent,” said Rajesh Agrawal, Treasurer, Federation of Surat Textile Traders Association.

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