Tiruppur knitwear industry seeks Centre’s support for worker housing as FTAs boost order inflows

A hostel for knitwear workers at Tiruppur | Photo Credit: Supplied

With India signing a series of Free Trade Agreements (FTAs), the knitwear industry in Tiruppur, the country’s largest apparel export cluster, has sought the Centre’s support for the construction of large-scale affordable rental housing for workers, citing growing challenges in labour retention.

Industry sources said organised worker accommodation would be critical to attract and retain labour, as Tiruppur is expected to see a sharp increase in hiring over the next few months following higher order inflows triggered by FTAs and recent tariff changes announced by the US .

At present, individual companies arrange accommodation for their employees. However, exporters are now willing to pool resources and develop large hostels with government support. The proposal draws inspiration from the large worker housing facilities built for mobile phone manufacturing units in the Oragadam–Sriperumbudur industrial cluster, leveraging the Affordable Rental Housing component under PMAY-U 2.0.

According to the Tiruppur Exporters’ Association (TEA), the estimated cost of establishing hostel facilities is around ₹2 lakh per bed. It has proposed hostel capacities ranging from 250 to 1,000 beds and has sought removal of the 18 per cent GST on rent deducted towards worker accommodation.

Tiruppur employs nearly 10 lakh workers, of whom about 3.5–4.5 lakh are migrants from 19 States. Women account for nearly 70 per cent of the workforce. Nearly one lakh workers commute daily from nearby districts.

Major constraint

The lack of organised, affordable housing has become a major constraint in sustaining growth and meeting export commitments,” said N Thirukkumaran, Chairman, Esstee Exports India Ltd, Tiruppur, and Secretary of TEA.

In a representation sent to the Central government, the association said investment in worker housing would yield tangible productivity gains.

Shorter commutes and improved living conditions could boost efficiency by 15–20 per cent, while quality accommodation could reduce labour turnover by 30–40 per cent, significantly lowering recruitment and training costs.

Among other measures sought are a 40 per cent capital subsidy on hostel construction, capped at ₹80,000 per bed; simplification of land-use regulations to permit worker hostels on industrial land; permission to use common infrastructure such as power supply and sewage treatment plants; and waiver of land development charges and building approval fees.

A company official said, housing is essential to ensure business continuity, retain skilled workers and meet delivery schedules. Worker welfare has become central to competitiveness in global apparel markets.

During FY25, Tiruppur recorded knitwear exports worth ₹44,747 crore (around $5.4 billion), accounting for nearly 68 per cent of India’s total knitwear exports. The cluster has about 2,500 registered exporters and nearly 20,000 standalone manufacturing and support units.

Published on February 26, 2026