Study on export scenario of knitwear units of Ludhiana in comparison to Tirupur
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Date
2019
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Punjab Agricultural University, Ludhiana
Abstract
The present research was conducted to study the export scenario of knitwear units of Ludhiana in
comparison to Tirupur. Thirty units each were selected from both the districts through random
sampling technique. An interview schedule was formed and pre-tested on 10 non-sample units. The
data collected from the units was analysed using percentages, Chi square test and Z test for proportions.
It was found that maximum percentage of the units in Ludhiana were small sized and in Tirupur were
medium sized. Majority of units in both the places had a turnover below `100 crores. More than 80 per
cent of the units were exporting their products to foreign markets. Production capacity of knitwear units
at Ludhiana and Tirupur was less than 3 lakh pieces per month. Almost 50 per cent of the units at both
the places were mid price clothing companies and low cost mass producers, respectively. For
designing, sketches received from foreign buyers and fashion shows were ranked first, as a source of
inspiration, by knitwear export units of Ludhiana and Tirupur, respectively. During peak periods,
capacity utilization was 90-100 per cent by 80 and 50 per cent of the units whereas in lean period it was
70-80 and 60-70 per cent by more than 36 per cent of the knitwear units at Ludhiana and Tirupur,
respectively. Majority of the units at both the places used cotton, polyester and lycra as raw material. In
- house training to the workers was provided by 83 and 41 per cent of the knitwear units in Ludhiana
and Tirupur, respectively. In Ludhiana, 63.33 per cent of the units used CAD/CAM machines to reduce
fabric wastage while majority of units (96.67%) in Tirupur used organic cotton in their product line as
an eco friendly concept. Ludhiana as well as Tirupur ranked one to one meeting with buyers as the best
channel for promoting their products in export markets. Banks were used as source of capital by
majority of the units in Ludhiana and Tirupur (93.33 and 80.00 %). Main markets for Ludhiana
exporters were USA and Middle East whereas for Tirupur major destination countries for export were
USA and UK. More than 80 per cent of the units at Ludhiana and Tirupur negotiated with the buyer to
determine the pricing. Lead time of 30-60 days was required by most of the units at both the places.
Letter of credit was main payment term used by more than 66 per cent of the units at Ludhiana and
Tirupur. Major reason for rejection of the order was non conformance to the buyers‘ specifications in
Ludhiana while delay in production or shipment was responsible for consignment rejection in Tirupur.
In Ludhiana, the most serious impediments were high or fluctuating prices of raw material, costly
machinery and rapid up gradation of the machinery, unskilled labour, high rate of interest, high cost of
power and competition from other countries, while in Tirupur, these were low quality of raw material,
injuries to human health, unskilled labour and scarcity of power.
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