Embroidery sector of Surat faces shut-down with rising losses

An important contributor to Surat's economy- the embroidery sector - is fast losing its sheen due to lack of demand and overproduction. Payments are halted and unit holders are finding it hard to meet rising capital and production costs. Unable to bear the crisis, many unit holders are switching to other businesses.

Embroidery sector provides employment to more than seven lakh people in Surat. While the sector was booming during 2001-2008, it started to lose its sheen during the recession and still hasn't revived from that jolt. Old players are somehow managing; the situation is worse for new players.

"Stiff competition has worsened the situation. Earlier, a unit holder used to get between Rs1-2 for one stitch, which has now come down to 50-90 paise per stitch. Rates have fallen by more than 50%, but production costs are continuously rising," said Balwant Patel, an embroidery unit holder at Bamroli.

Patel added that he used to own three embroidery machines in the past, but now has only one. This is because repayment is less than 2% against investment made.

While some unit holders have decreased their work, some are switching over to other businesses. For instance, Kalpesh Rana is now in the business of edible oil. Rana has closed his unit and has given his 10,000 sq ft space on rent.

While situation of embroidery unit holders is bad, so is that of persons employed in these units. Santosh Patil, who worked as supervisor said, "Our unit holder is closing the unit and we have been asked to find another job after Diwali.”