The fall of the Afghanistan government and the seizure of power by the Taliban has hit textile traders and exporters from Gujarat’s textile hub Surat as payments worth more than ₹100 crore have apparently been stuck since the beginning of August.
“Yes, it is true that payments for consignments dispatched from Surat have been stuck due to the political situation in Afghanistan. We don’t have the accurate figure but it’s a substantial amount since Surat is a major hub of textiles exports to countries like Afghanistan and Iran, and several other countries,” said Ashish Gujarati, a prominent textiles businessman and head of the South Gujarat Chamber of Commerce and Industries (SGCCI).
However, he stressed that there is no direct business between traders or exporters from Surat with traders of Afghanistan. “The trade of textiles consignments consisting of finished garments like Punjabi ‘suits’ and dupatta s or dress materials or fabrics is done via traders or agents based in either Dubai or Dhaka, or through agents in Delhi,” Mr. Gujarati explained.
So, according to him, traders in Surat may not have to forgo the payments that have been stuck but there will be delays since the entire supply chain cycle has been disrupted due to political uncertainty and change in Afghanistan. There is a normal credit cycle of 60-90 days in domestic or exports-based textile trading.
Bansilal Jain, a trader who exports fabrics and garments to almost a dozen countries, concurs: “We used to ship consignments regularly to Afghanistan via Dubai or Dhaka in Bangladesh. However, since the first COVID-19 lockdown in March 2020, our supply chain has been severely affected. Only recently, some consignments were dispatched in May and June. There is some delay in the payment but it will hopefully be resolved since our agents in Dubai have assured us.”
In Surat, traders and exporters contend that before COVID-19 hit the global markets as countries imposed strict lockdowns affecting supply chains, fabrics and garments worth ₹50-60 crore used to be shipped every month to Afghanistan via same routes — Dubai, Dhaka or even Doha in Qatar. But since July 2021, no significant consignment has been shipped from Surat for Afghanistan.
“From Surat, we used to ship consignments to the Chabahar port and from there to Afghanistan,” said another leading textiles businessman Sanjay Sarwagi, whose annual turnover is ₹500 crore.
Surat is among the largest textiles hubs in the country, with an annual turnover of ₹1 lakh crore.