California Apparel News

Fabric shipments from India have been delayed due to lost production and disruptions in the supply chain in the wake of the Jan. 26 earthquake in the Indian state of Gujarat, but Los Angeles-based textile importers call the setbacks temporary.

Several Southern California textile and apparel importers said they were shocked by news of an earthquake that tore through Gujarat, where many buy their shipments. The state is known as India’s leader in trade, business and industry. The cities of Ahmedabad, Surat, Vapi, Bhuj and Jetpur are India’s leading textile manufacturers, and the country’s most vital port, Kandla, accounts for 15 percent of the nation’s exports.

Last year, India exported $3.1 billion in textiles to the U.S.; the Los Angeles area received more than $359 million in Indian apparel, according to the U.S. Bureau of Census Department of Commerce.

While estimates of damages to factories in the state continue to rise (now estimated at over $300 million), total economic damage could cost the country about $2.2 billion, according to the Confederation of Indian Industry.

InAhmedabad, where many manufacturing facilities are being torn down and reconstructed, about 30 to 40 percent of the textile factories were severely damaged, according to an industry source who recently visited the city.

Representatives of the state claimed there wouldn’t be an impact on textile production, even though production hours were cut back considerably after the earthquake. Textile and apparel production has not ceased altogether (in fact, many factories have returned to their normal work hours, according to some Indian importers); however, industry sources said production loss in previous weeks cost the state almost 20 percent of its annual earnings—a hefty sum considering India’s total exports to the U.S.—including textiles, were valued at $10.7 billion last year, according to U.S. Census Trade Bureau.

“Workers are going back to work, but there are still hundreds [of workers] who are not willing to return until the structures are reconstructed for safety,” said Ashutosh Gupta, head of U.S. operations at SKAY Inc., a subsidiary of SKY Industries Ltd. India.

“Building inspectors are looking at the buildings very closely,” he said. “Buildings that appear weak are being torn down and rebuilt. That is the only way some of these people will return to work.”

Gupta, who is based in the California Mart, said his company was fortunate: its textile factories in Surat (where 80 percent of Gujarat’s fabric mills are based) received only a limited amount of damage.

But many industry observers said India’s textile industry will recover quickly.

“Indian people know how to work against the odds,” said Nari Khiani, owner of Los Angeles-based Indian fabric importer Jay Ann Fabrics Inc., who said he was in Bombay on business when the earthquake occurred.

“The feeling is positive in the Indian community [in general] and we’re trying to provide the best relief possible.”

Indirect Effects

Aftershocks and tremors continue to roll through India but several local apparel manufacturers and textile importers said they are waiting for the disaster’s ripple effects to end before they determine their economic loss. Many importers stressed that their businesses were unaffected by the quake, but other industry sources said their businesses are being affected indirectly by delays in the textile supply chain.

Several chemical-making factories in the northwestern city of Bhuj were either completely destroyed or severely damaged, and are not capable of producing raw materials such as soda ash, salt and other chemicals used for pharmaceuticals and textile dyes.

“Now there’s a shortage of products used to process dyeing and printing,” explained Khiani, who purchases his material from a factory in Bombay, which gets its supplies from Bhuj.

“Most of the states in India depend on these factories to produce these materials,” he said. “Textiles factories will be affected by the lack of production of these chemicals and then, as buyers, we are affected.”

For some factories, the cost of dyes and chemicals has nearly doubled as a result of the shortage, according to Khiani, who said the price of importing those textiles now costs him 25 percent more than what he normally pays for his supply.

Khiani said he isn’t worried about the rate hike because he believes it is only temporary until the state is stable again.

Meanwhile, Los Angeles importers said they are waiting patiently for their orders to arrive. At Kandla, three of the port’s eight berths were recently opened, but local importers said the backlog of shipments could be delayed for a few weeks.

Increasing delays pose a problem to importers not just in Los Angeles, but throughout the U.S.

“These delays are to be expected,” said John Simpson, president of the American Association of Exporters and Importers. “Shipments from India have been rerouted to different areas in the U.S., so it might take a little longer than people expect.”

Simpson said shipping by airfreight is an alternative, albeit a costly one.

One importer in Los Angeles who asked to remain anonymous said her company’s orders were also delayed several days because of shipping problems at the port. She buys her rayon textiles from Bombay, which wasn’t affected by the earthquake, but her ability to export the material depends on a reliable supply of greige goods from Gujarat. She said her operations haven’t suffered yet, but predicted that her company would soon face a short supply of the raw fabrics used in production due to shipping delays caused by the earthquake.

Getting Back in the Game

Jack Kyser, chief economist at the Los Angeles County Economic Development Corporation, said Indian textiles have been attractive to manufacturers in terms of cost and quality for years, but now Indian exporters will need to come up with a game plan if they want to keep business moving.

“Some of the questions critical to the present and future of Indian business are these,” Kyser said. “Will they be able to make a quick turn in goods? Can they guarantee transportation of the goods and can the exporters who were affected by the earthquake guarantee quality control? ”

Sri Sridharan, the U.S. director of the Federation of Indian Chambers of Commerce, said the Indian government plans to address the country’s export/import policy in April, which, he said, may or may not have an impact on those who are presently importing apparel and textiles into the U.S.

Sridharan said the government’s main concerns are restrictions in the current import/export policy and effectiveness for exporters. “Right now the Indian government wants to make incentives for exporters,” he said.

Many importers are reluctant to say that there will be any long-term effects on the local market; rather, Jay Ann’s Khiani said, the community seems to be taking a wait-and-see-what-happens approach to doing business. It’s a not a position Khiani necessarily likes, he said, but added, “everything will eventually get back on track.”

“Indians are very enterprising,” he added optimistically, “so they will get back on their feet.”

Relief International is collecting clothing, food, blankets and other supplies to send to the earthquake victims in India. For more information, contact Relief International, 11965 Venice Blvd., Suite 405, Los Angeles, CA 90066.