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Ban on coke may raise garment prices

Some 150 garment manufacturing plants in the Delhi-NCR have been hit by a Supreme Court order banning the use of petroleum coke and furnace oil. The ban on pet coke has come as a blow to the garment industry in the region at a time when it is already struggling with GST.

There are some 800 export hubs in Gurgaon and around 4,00,000 people are employed in these manufacturing units. Another 300 such units are there in Manesar. These units send fabrics and garments to mills that use pet coke. Even though the processing will restart with the help of alternative fuel, prices will increase significantly by Rs 5 per meter resulting in a hike in garment prices by Rs 30. With thin margins, this additional cost will come as a dampener for the industry as a whole.

This is the peak season for the industry which has big orders to deliver. Due to the pet coke ban, things have come to a temporary halt, which is bound to delay orders. The combined effect of GST, demonetisation and now the pet coke ban might make manufacturing business an unattractive. The Delhi-NCR belt is one of the country’s top textile manufacturing hubs.