textile exporters in Surat: Textile exporters in Surat in a bind over Afghan crisis; nearly Rs 4,000 crore stuck in pending dues

Textile traders in Surat are worried over pending payments of about Rs 4,000 crore from Afghanistan which have got stuck with the Taliban taking control of the country.

Afghanistan’s central bank has instructed the commercial banks not to allow corporate bank account holders to withdraw money for any purpose or to carry out any electronic transaction inside or outside of Afghanistan. “Earlier, we used to send garments and textiles through Dubai to Afghanistan. Lately, we were exporting to the nation through Bangladesh as we saw that it was cheaper to send through Bangladesh,” Champalal Bothra, general secretary, Federation of Surat Textile Traders Association, told ET.

“Exports have stopped now, but we are not sure when we will get our payments. Nearly Rs 4,000 crore is stuck.”

Afghanistan used to buy silk for turbans, textiles and readymade garments such as scarves, dresses and kaftans from India. The Federation of Indian Export Organisations (FIEO) has advised exporters and importers to wait and watch before taking any step. “The Afghani currency has depreciated to 87 Afghan afghani against US dollar from 80 Afghan afghani in the last one week. While that augurs well for exporters, it pinches the importers,” said Ajay Sahai, director general, FIEO.

Feeling-the-pinch

“Businesses in Afghanistan have informed us that the central bank of the country has said that it will not provide enough dollars to the local banks. This means that Afghan business houses will not be able to pay the exporters.”

The textile trade in Surat is not in a comfortable position either since the outbreak of the Covid-19 pandemic. Bothra said most of the mills are working with 60-70% capacity as the demand has yet to recover fully. “Lockdowns and local restrictions have impacted sales since April, when the second wave of Covid had hit the country. We are now pinning hopes on Durga Puja, Navratri and Diwali sales,” he said.

Surat has 380 textile mills, 650,000 looms, 65,000 traders and 100,000 embroidery units. The textile trade in Surat employs 1.1 million people.

“Mostly migrant workers from UP, Bihar, West Bengal and Odisha are engaged in the textile trade of Surat. Since the outbreak of Covid-19, 30% of the migrant workers who had left are yet to return,” said Bothra.

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