Industrialists and entrepreneurs in Tirupur, the knitwear capital of India which is home to nearly 1,500 garments manufacturing companies, suspect that China is playing havoc with the cotton and cotton yarn, the main raw materials in the enterprises.

The hike in cotton prices during the last two months is the handiwork of certain forces out to destabilize Indian economy, said Raja S Shanmugham, President, Tirupur Exporters association (TEA).

He cautioned that if the price hike continues like this, the entrepreneurs would be left with no alternative other than downing the shutters. More than three lakh workers are employed by the TEA-run entrepreneurs.

The profit generated out of TEA units is too low as this is a labor intensive industry. Industrialists are struggling to stay afloat and competent in a volatile market. The price hike has no justification at this juncture, he added.

Representatives of South India Mills Association, another powerful industry body said that cotton prices have shot by more than 50 percent since the beginning of 2021. The steep hike in cotton prices (Minimum Support Price Rs 5,726/- per quintal) is the highest rate in the recent past, added S Sakthivel, Executive Secretary, TEA.

Shanmugham said there was no justification for the current price hike. The competitiveness enjoyed by informal clothes manufactured in the hub became an eyesore for our competitors, he added.