Industry associations to meet textile mills on September 9; rising input costs put pressure on margins and export competitiveness
Rising cotton yarn prices have emerged as a major concern for garment manufacturers in Tiruppur, prompting industry associations to initiate direct discussions with textile mills in an effort to find a sustainable solution.
Representatives of nine garment-industry associations met in Tiruppur on September 2 and subsequently constituted the Joint Committee of Tiruppur Textile Cluster. The committee has invited representatives of four textile mill associations for a meeting on September 9 to discuss the sharp increase in yarn prices and its impact on the knitwear industry.
According to industry representatives, cotton yarn spun in Tamil Nadu is currently priced around ₹18–20 per kg higher than yarn from mills in Gujarat, adding to the cost pressures faced by garment manufacturers and exporters.
The industry had earlier sought the removal of import duty on cotton, and the Centre has temporarily removed the duty through October. However, garment manufacturers say the expected benefit has not translated into lower yarn prices.
Export competitiveness under pressure
The continued rise in yarn prices is particularly challenging for exporters, who often commit to international orders well in advance and have limited flexibility to pass on sudden increases in raw-material costs.
Industry representatives say production costs for knitwear have increased significantly, while overseas buyers remain reluctant to accept corresponding price increases. This is putting additional pressure on exporters’ margins and, particularly, smaller manufacturers.
The issue is also linked to India’s growing yarn exports. According to industry data cited by the associations, the value of cotton yarn exports to China increased from ₹348 crore in the first quarter of the previous financial year to ₹1,668 crore during the corresponding period this year. Exports to Vietnam also rose from ₹263 crore to ₹500 crore during the comparable April–June periods.
The sharp increase in exports has intensified concerns among Tiruppur manufacturers over domestic availability and pricing.
Industry seeks collaborative solution
Rather than approaching the issue only through government intervention, the Tiruppur associations are now seeking a direct dialogue with spinning mills.
The September 9 meeting is expected to focus on possible measures to improve price transparency, address domestic supply concerns and explore ways to reduce volatility in yarn prices.
The industry is also expected to take up the matter with the Central and State governments following discussions with the mills.
The developments come at a critical time for Tiruppur, India’s leading knitwear manufacturing and export cluster, where rising raw-material costs are being compounded by pressures related to labour, logistics and global competition.
The bigger challenge
For Tiruppur’s apparel industry, yarn-price volatility is no longer simply a procurement issue. It directly affects cost competitiveness, order pricing, production planning and the ability of Indian suppliers to compete with manufacturing hubs such as Bangladesh, Vietnam and other Asian sourcing destinations.
The outcome of the September 9 meeting could therefore be significant—not only for yarn pricing, but also for the broader relationship between the spinning and garment segments of the textile value chain.
Perfect Sourcing View: A more predictable and transparent raw-material pricing mechanism, combined with stronger collaboration between mills and garment manufacturers, could help the Tiruppur cluster protect its competitiveness while continuing to expand its position in global apparel sourcing.
