Kashmir Valley communication curfew hits Ludhiana hosiery industry

The largely unorganised business is heavily dependent on Kashmiri traders around the onset of winter—some business-owners sell almost 85 percent of their goods to the region. Some haven't received a single order this season

By Arjun Sharma

Published: Sep 16, 2019 08:41:26 AM IST

Updated: Sep 24, 2019 12:17:02 PM IST

Image: Danish Siddiqui/Reuters

Jammu/Ludhiana: The communication clampdown in Kashmir is sending negative ripples through businesses not just in the region. Ludhiana’s hosiery sector is an example of one that has taken a major hit this season, attributed largely to the volatile state of affairs in Kashmir.

Almost 40 days after the government announced the abrogation of Article 370 and bifurcation of Jammu and Kashmir on August 5, the internet, mobile phones and some landlines are still snapped due to the fear of imminent turmoil.

There are nearly 12,000 small and large hosiery units in Ludhiana, which include many unregistered factories. Sweaters, pullovers, jackets, shawls and blankets, among other goods, are manufactured at these units and then procured by Kashmiri traders for local retail markets. The business is largely unorganised, and driven by an army of migrant labourers from central and eastern Indian states. Small units are set up even in the bustling lanes and bylanes of Ludhiana. Some of the country’s top woollen brands are also located in the industrial city.

"This season has been washed away," said Vinod Thapar, president of the Knitwear and Textile Club, Ludhiana. "While there is no hope of many orders from Kashmir this season, some pending payments of last year from Kashmiri traders are also stuck."

The woollens industry in Ludhiana was set up decades ago to cater to the needs of the former Soviet Union. After the disintegration of the USSR, hosiery units started manufacturing goods for local market as well as European nations. With single-room units located in every nook and corner of the city, the hosiery industry is able to generate revenues of around Rs 13,000 crore per year, as per industry leaders. A small unit can manufacture 20-50 woollen garments in a day, whereas a big unit’s daily production capacity can be anywhere around 3,000-4,000 garments.

Ludhiana hosiery is so closely associated with Kashmir that even a natural calamity in the Valley means a direct impact on the economy of the former. In September 2014, freak floods ravaged the Valley, after which Ludhiana hosiery manufacturers suffered severe losses.

It has been a lacklustre response from even traders in Jammu, where mobile phones (but not mobile Internet) and landlines are operational. Typically, the Jammu retail market starts buzzing around October-November, when Darbar (biannual shifting of government offices) moves to the city from Srinagar. Kashmir-based government officials, along with their families, shift to Jammu for six months to escape the harsh winters in the Valley.

Sudershan Jain, owner of a garment brand—Oner—based in Ludhiana, said that while the retailers purchase woollens for their shops, a substantial number of wholesalers from Jammu procure goods for markets in Kashmir. "There are many Kashmiri traders who do not visit Ludhiana, but prefer to purchase goods from Jammu due to its proximity to the Valley. However, hosiery in Ludhiana has ceased to receive bulk orders even from Jammu wholesalers this year, because they know the markets in Kashmir are closed," said Jain, who is also the president of the Knitwear and Apparel Manufacturers Association.

Hosiery products worth Rs 500 crore are procured from Ludhiana by Jammu and Kashmir, out of which goods worth nearly Rs 150 crore are used in Jammu’s market, according to Jain. “While the Rs 350 crore market (Kashmir) is completely out of bounds this year, there is little hope even from Jammu,” he said.

Gaurav Deep, 33, a garment dealer from Domana of Jammu, has two concerns: the country’s economic slowdown and the prevailing situation in Kashmir; Rs 50,000-worth of woollens that he procured remain stuck in his godown.

Deep has been unable to contact his customers—Kashmir-based traders—who buy woollens from him each year. "Usually, August to September sees many Kashmiri traders visiting my shop. They also buy fur shoes from me. But no one has turned up so far due to the restrictions in the Valley," he says.

With his investment held up, if Deep cannot settle his dues with the manufacturer within 2-3 months, his reputation will be at stake, and he may not get goods on credit in the future. The manufacturer is based some 290 km away in Ludhiana, a region known for heavy production of hosiery products.

Small hosiery owner Sahil Verma, 42, based out of the Daresi area of Ludhiana, is in a similar condition. Until 2018-19, Verma would ship woollens worth Rs 8 lakh to Kashmir every year. "Kashmiri dealers and wholesalers visit my hosiery to place orders in August. Some of them, with whom I have a good relationship with, even place orders over the telephone. The Kashmiris would take goods on credit and pay the amount after a few months. This was a business of trust.”

“I have not received a single order this year as no communication channel is open,” says Verma, adding that 35 per cent of his business is dependent just on Kashmir, while the rest is from the other parts of the country.

Thapar explains that woollens are not bought only by local Kashmiris, but also by tourists and pilgrims of the annual Amarnath yatra in Kashmir. "There are more than 100 manufacturers in Ludhiana who exclusively manufacture woollens for Kashmir. Even if the communication channels are thrown open now, these manufacturers may not be able to make sales as expected,” he says.

Thapar adds that the dealers in Jammu, who used to place orders for the Kashmir region, are not showing much interest this year as they are aware that supplies could be stuck in case the deadlock extends for a while.

Hosiery manufacturers, however, are not losing hope; if the situation returns to normalcy by early October, they believe they can save themselves from heavy losses.

Charanjeev Singh, secretary of the Knitwear Club, Ludhiana, said that even as the industry has suffered losses, manufacturers are hopeful of orders from other parts of the country. "While J&K contributes a substantial chunk of business for Ludhiana hosiery, we still have hope from other states from where we will receive orders, after winter sets in,” he said.

"As we always received earliest orders from Kashmiri traders, it was always the valley that used to let us know what trends were in for the season. Unfortunately, this year, the valley will not speak," said Singh.

(The writer is a Ludhiana-based freelance writer, and a member of 101Reporters.com, a pan-India network of grassroots reporters)