Impact of Rise in Yarn Prices over Textile and Power Loom Industry

Nowadays, if you glance at your surroundings, there is a war zone that has surrounded the several countries of the world. In South and central Asia, Afghanistan war and Indian Occupied Kashmir movement has influenced the economy of Iran, Pakistan, USA, and India.

Chechnya and Syria War is influencing Russia. Iraq and Syria war has affected Turkey, Iran, Saudi Arabia, USA, Russia, Yemen, Egypt and almost various states of Arab block.

Most of the countries are spending on war for fighting, defending and buying weapons. As a result, the war has influenced the economy of several countries adversely. To recover their deficits, states increase different types of taxes such as GST (Goods and Services Tax) to the public and private sector.

These taxes are paid by the consumer but also set pressure over manufacturer because on one side it cuts the profit margin of business people on retail prices and on another side cost of raw material increases when manufacturer went to buy them as a business consumer.

In this way, the rise in GST Taxes gives the severe hit to manufacturers and suppliers. Several industries are influenced by the impact of war and increase in GST, and if we talk about Textile and Power Loom Industry they have also got a significant damages in several countries.

The weaving sector power loom has reeled under the shocking effects of GST implementation. Imposition of GST has raised the prices of polyester yarn and nylon.

Several Power Loom Machine Manufacturers say that due to GST implementation in different regions of the world. It can influence the second and frontline spinners to increase the prices of nylon yarn by 30% per kg and polyester yarn by 20% per kg. It can give a significant blow to the manufacturing of weavers and grey fabrics that can incur a loss to power loom manufacturers per meter.

GST implementation in turn affects the rise in yarn prices. Increase in the price of yarn can destabilize the entire sector of textiles. The statistics of loss is incurring in the textile industry because yarn is the primary raw material of power loom industry that helps to weave fabrics and textiles.

Due to rise in yarn prices, weavers incur a significant loss in dollar value per meter. As a result, loss of the material of nylon fabric will be gigantic.

In India, due to price increment in yarn, polyester fabric demand, including dress material, is low at present. Business turnover in power loom sector has decreased by approximately 60% in few last months.

Due to drop in textile and power loom sector, the power loom machines can be sold off in scraps. In India, 150 power loom machines are sold on the average daily basis due to textile crisis.

Conclusion Governments must think before imposing taxes what can be after effects on the economy. They need to think strategically and view the effects on society and business sector from the several dimensions such as economic, technological, legal, political and societal while imposing the taxes on the business sector.

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