Gujarat’s textile industry is facing mounting production costs ahead of the Diwali festive season as rising coal, crude oil and natural gas prices increase energy expenses, transportation charges and raw material costs. The situation is putting pressure on manufacturers preparing to meet seasonal demand.

Textile processors in Surat are particularly affected by rising coal prices, which have reportedly doubled from around ₹5,000 to more than ₹10,000 per tonne in recent months. The increase has pushed processing costs up by over 20%, while manufacturers struggle to pass the entire burden on to buyers amid intense competition.

Higher yarn, dye and chemical prices are adding to the pressure across the textile value chain. Electricity tariffs have also increased by ₹0.50 per unit since August, while overall input costs have risen significantly, according to industry representatives. Some processors have passed on approximately 10% of the additional costs to customers, with further price increases possible.

Uncertainty over coal supplies, power availability and renewable energy generation is creating additional challenges for textile mills. Spinning units in Kadi and Saurashtra are experiencing operational and financial stress due to restrictions on captive solar power generation, forcing greater reliance on expensive grid electricity.

Industry leaders warn that prolonged cost increases could reduce production, squeeze profit margins and affect employment across Gujarat’s labour-intensive textile sector. Manufacturers are seeking government support to address coal supply constraints and rising input costs.

The challenges highlight the need for stable energy supplies and competitive manufacturing costs to protect the profitability of textile businesses and maintain India’s export competitiveness.