Noida Apparel Exporters Struggle to Absorb Wage Hikes Amid Rising Costs
Cannot absorb hike in wages: Noida exporters
The Economic TimesImage: The Economic Times
Apparel exporters in Noida, Uttar Pradesh, are unable to absorb the up to 21% wage hike mandated by the state government due to increasing costs and pressure from global buyers threatening to relocate orders. The unrest among workers is impacting future orders and could lead to significant shifts in manufacturing to countries like Bangladesh and Vietnam.
- 01Noida exporters face challenges absorbing a 21% minimum wage hike effective April 1.
- 02Rising input costs and renegotiations by global buyers threaten to shift orders to competing countries.
- 03The unrest has already started impacting future orders from Noida's apparel hub.
- 04Workers demand a minimum salary of ₹20,000, rejecting the government's proposed wage increases.
- 05The Uttar Pradesh government claims external elements incited violence during the protests.
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Apparel exporters in Noida, Uttar Pradesh, expressed their inability to absorb the up to 21% wage increase announced by the state government, effective April 1. Lalit Thukral, president of the Noida Apparel Export Cluster, highlighted that rising input costs and pressure from global buyers are forcing them to renegotiate prices, with some buyers considering shifting orders to countries like Bangladesh, Cambodia, or Vietnam. The wage hike raises minimum monthly pay for unskilled labor to ₹13,690, semi-skilled to ₹15,059, and skilled labor to ₹16,868. However, workers have rejected these increases, demanding a minimum salary of ₹20,000. The ongoing labor unrest risks disrupting shipments from the Noida hub, which employs between 800,000 to one million workers and exported garments worth approximately ₹50,000 crore (roughly $6 billion USD) in FY26, accounting for over one-third of India's apparel exports. The Uttar Pradesh government stated that 45 of the 66 arrested individuals in connection with the unrest were not workers, indicating external influences inciting violence and arson during protests.
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The wage hike and ongoing labor unrest could lead to significant disruptions in the apparel export industry, affecting job security and future employment opportunities for workers in Noida.
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