Will Bhiwandi’s looms ever get going again?

Hit hard by the first wave, the powerloom industry says it will not survive the high taxes, crippling production costs and market forces in the current situation if the government does not step in

India has always been known for its textiles, but the sorry state of the fabric manufacturers in a city in Maharashtra that makes up over 25 per cent of the country’s textile industry, is a warning about how this could change soon.

Powerloom units in the city of Bhiwandi are in deep crises due to the Covid-19 pandemic. But manufacturers also blame government policies that have led to black marketing and the monopoly of big industries over yarn, which has added to their woes.

Today we have more than 7.5 lakh manual power looms and around 25,000 auto power looms across Bhiwandi. The textile industry employs more than 12 lakh people and 80 per cent are migrant workers from Bihar, Uttar Pradesh, Jharkhand, West Bengal and other states. But unfortunately, the industry has been suffering for the past few years and now the pandemic is like the last nail in the coffin. The government has always ignored this unorganised sector and today we are on the verge of shutting down due to its anti-textile industry policies,” said Abdul Rashid Tahir Momin, president, Bhiwandi Powerloom Weavers’ Federation. According to Momin, 50% of the workers have not returned after the lockdown, 25 % have taken up other jobs and 25% are back, but working in single shifts.

He said the first wave of Covid-19 did a lot of damage which can be seen in the second wave though the industry is working, because the demand is very low due to which the workers are not returning.

‘Bangladesh doing better than us’

The power loom owners claim the ignorance of the central government is causing lot of damage to the industry. “We were number two when it comes to the textile industry after China, but now Bangladesh is doing much better than us. Many power loom owners have shifted to Bangladesh as their policies are far better than ours - for instance, they get a huge subsidy in electricity bills and have government controlled yarn prices,” Momin added.

Migrant workers who were the backbone of the powerloom industry have not returned, as they don’t have clarity

According to the power loom owners, the lockdown last year caused a lot of damage to the textile industry in Bhiwandi which was trying to survive after demonetisation and GST. They said the Goods and Service Tax (GST) was the beginning of the devastation. “Earlier we would only pay 2% Value Added Tax (VAT) on yarn. Now we end up paying 12% tax on raw materials due to which many have shut down their looms. In fact I shut down some of my units,” said Ehsan Ansari, a power loom owner.

“The government gives back 5% once the clothes are ready, but it takes lot of time and we pay 12% at the time of purchase. The government says that they have reduced the taxes but in reality we are paying more taxes now than earlier. They are unable to control the black marketing of raw material which is increasing every day, as the private players have full control over the price,” said Rupesh Agarwal who now owns only one power loom unit with just two workers.

He also said many of the migrant workers who were the backbone of the power loom industry have not returned, as they don’t have any clarity. Around 25% migrant workers have switched to other jobs.

Mohammed Saad, power loom unit owner

‘Textile chalega to shahar chalega’

Mohammed Saad, another owner who also shut down multiple units, said, “Textile chalega to shaher chalega (The city will exist only as long as the textile industry exists). If the government had created proper policies, we could have survived the pandemic. Earlier I used to get R8k electricity bill for one unit which has 24 power looms, now I get Rs 30k for one unit. The profit has gone down and the cost of production has doubled. Earlier yarn prices were decided by the government and they changed on the 1st of every month. We could decide our profit margin accordingly. Now every morning we wake up to the news that prices of yarn have increased or fallen, and they keep fluctuating making business very difficult.”

Rupesh Agarwal power loom unit owner

According to the federation, they have been facing a rise in the electricity bills in the past 10 years, and have protested about it but the government ignores them. “Earlier we used to get electricity Rs 3 per electrical unit and we had 60% subsidy (Rs 1.25) which was given by late former chief minister Vilasrao Deshmukh in 2000. After that many a time the electricity tariff has been revised, now the electricity rate is Rs 6 per electrical unit and we pay Rs 3 per electrical unit. The cost of production is also rising and so are the bills. The government must look into this,” Momin said.

“Earlier there used to be 30% fund called TUF (Textile Upgradation Fund) which the Modi government has minimised to just 10% and this needs to be checked,” said another trader.

According to the federation, China with its latest technology, is equally contributing to the destruction of India’s textile market. “As there is no duty for SAARC countries, China supplies all its textile products to Bangladesh, Bhutan, Nepal and Sri Lanka and the same comes to India at a cheaper price. We end up purchasing Chinese yarn which is boosting their economy. The government needs to control this as well by imposing anti-dumping duty on other countries,” Momin said.

What will we do, ask migrant workers

Shafir Ansari, 30,
Shafir, from Jharkhand, earned Rs 700-Rs 1,000 per day and now gets Rs 500-Rs 600 per day but gets work only 4-5 days a week. “We used to work in four different shifts now only one shift is there with just two three workers. If this industry shuts down what will we do?” he said.

Salman Ansari, 30
Ansari, also from Jharkhand, used to earn Rs 500-Rs 700 per day before the pandemic and now earns Rs 400-Rs 500 but gets work only some days a week. “Many of my colleagues have taken up other jobs. But I can’t even think of that. We just hope that the government will save our jobs,” he said.

What traders want

The traders want the government to work on this four-point agenda to revive the Bhiwandi textile industry:
>> More subsidy for electricity.
>> Fixed prices of yarn.
>> No frequent changes in government policies.
>> Modernisation of the textile industry to compete with China

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