Surat’s textile industry is facing mounting financial pressure as yarn prices have surged 40–45% since June, raising the prospect of an early Diwali shutdown for weaving units across Gujarat. The sharp rise in raw-material costs, coupled with sluggish demand for finished fabrics and delayed payments, is squeezing manufacturers’ margins and disrupting production.
The crisis highlights a growing mismatch between input costs and market realisations. While yarn prices have risen sharply, grey fabric and finished textiles continue to face weak demand and limited pricing power. Unsold inventories and slower payment cycles are further straining working capital, leaving manufacturers with fewer options to absorb rising costs.
Mahendra Ramoliya, director at Surat’s Sachin GIDC industrial estate, said
the increase in yarn prices following the outbreak of conflict in the Middle East had disrupted the textile value chain, forcing several units to operate fewer days each week.
Industry representatives are urging the government to monitor yarn pricing, address alleged artificial price increases and ensure domestic weavers have access to yarn at internationally competitive Free On Board (FOB) rates.
An extended shutdown could affect not only fabric production but also workers’ earnings, trading activity and businesses across Surat’s textile ecosystem.
With the festive season approaching, the industry faces an urgent challenge: restoring cost competitiveness and demand before mounting losses force more manufacturers to suspend operations.