Ludhiana Garment Industry faces triple blow of rising yarn, dyeing costs and power cuts
Sukhminder Bhangoo
Ludhiana (Punjab), September 14, 2026: Ludhiana’s garment and knitwear industry is facing mounting pressure as rising yarn prices, higher dyeing and processing costs and frequent power cuts squeeze manufacturers’ profit margins amid weak demand and intense market competition.
The city is one of Punjab’s major textile and knitwear hubs, but manufacturers are currently dealing with rising production costs while finding it difficult to increase the prices of finished products at the same pace.
Yarn Prices Push Up Production Costs
Yarn is a key raw material for Ludhiana’s knitwear sector. According to a report published in July 2026, prices of several varieties had increased by around 35 to 40 per cent since the beginning of the year.
Polyester yarn prices were reported to have increased from around ₹125 per kg to ₹165-170 per kg, while acrylic yarn prices rose from approximately ₹200 to ₹290 per kg.
The increase has raised the cost of producing sweaters, T-shirts, hosiery and other knitwear products. However, manufacturers face difficulties in passing on the entire increase to customers because of strong competition in the market.
Dyeing Units to Remain Closed
Higher expenses on gas, petroleum-based inputs, chemicals and energy have also increased the operating costs of dyeing units.
Various dyeing associations in Ludhiana have decided to keep their units closed from September 14 to 20.
The closure could affect the wider garment production chain as dyeing and processing are closely linked with yarn dyeing, knitting, cutting, stitching, finishing and delivery. Any disruption at the processing stage can therefore affect subsequent production schedules.
Power Cuts Add to Industry Problems
Unreliable electricity supply has emerged as another concern for industrial units in Ludhiana.
Reports in September indicated increased load management and power cuts in some industrial areas of Punjab. According to a September 12 report, certain Category-II and Category-III industrial consumers faced scheduled power cuts of up to 14 hours.
Dyeing units in industrial areas including Tajpur Road and Bahadurke Road were also reported to have been affected.
For manufacturers, power disruptions can result in more than temporary shutdowns. They can disturb production schedules, affect workers’ hours and increase operating expenses when units have to rely on alternative power sources.
Three-Way Cost Pressure
The industry is currently dealing with three major challenges: higher yarn prices are increasing raw-material costs, rising dyeing and processing expenses are adding to production costs, and power cuts are disrupting manufacturing and delivery schedules.
Together, these pressures are making it increasingly difficult for manufacturers and traders to protect their margins.
If the increase in raw-material and processing costs continues, some of the additional burden could eventually be reflected in the prices of finished garments. However, intense competition makes it difficult for manufacturers to immediately raise prices.
The widening gap between production costs and selling prices has consequently become a major concern for the sector.
Industry stakeholders are seeking measures to ensure a stable electricity supply, keep a check on raw-material costs and address the rising expenses faced by dyeing and processing units.
With yarn, dyeing and energy costs rising simultaneously, the coming season could prove particularly challenging for Ludhiana’s garment industry, affecting both production efficiency and profitability.