Spend Less in a Garment Unit: Fabric, Rework, Overtime, Energy (₹, 2026)
Six moves that cut cost, biggest first
Bars are the yearly ₹ effect of each move, the line is the running share of the total
- 1Halve the alteration loop on 20 lines₹33 L
- 2Raise marker efficiency by 1 point₹30 L
- 3Cut re-cuts from 1.5% to 0.5% of fabric₹30 L
- 4Cut the overtime run before ex-factory by a third₹14 L
- 5Servo motors on 300 sewing machines₹9 L
- 6Switch off idle sewing machines, lights and compressors₹1.5 L
- Total, six movesabout a quarter of the unit's ₹5.1 crore profit₹117.5 L
Worked example: 600-person unit, ₹75 crore turnover, ASI 2023-24 cost shares (spend-less breakdown, moves table)
How do you cut costs in an Indian garment unit? Start where the money goes. In MoSPI's Annual Survey of Industries 2023-24 (checked 20 Oct 2026), apparel factories spent 49% of output value on materials, 15.5% on emoluments and 1.9% on fuel, and kept 6.8% as net profit. So 1% saved on materials adds about 7% to profit.
Last checked: 20 Oct 2026
By the Mama Editorial Team. Industry shares come from the ASI 2023-24 tables published by the Ministry of Statistics (MoSPI). The 600-person unit in the worked example is an assumption; swap in your own ledger figures.
Key takeaways
- Materials are half the bill, so fabric comes first. In ASI 2023-24, materials consumed were 49.1% of output value in apparel factories (NIC 141). Fuels were 1.9%. A one-point gain in marker efficiency is worth more than a full energy programme in a sewing unit.
- Profit is thin, which makes savings leverage high. Net profit was 6.75% of output in the same table. Every ₹1 a unit saves on cost is worth what about ₹15 of extra sales would bring in at that margin.
- Alterations and pre-shipment overtime are the hidden labour lines. Neither appears as its own line in the accounts. Overtime piles up in the days before an ex-factory date, costs twice the ordinary rate under OSH Code s.27, and is the first thing buyer auditors check: SLCP found overtime outside legal limits in 52% of the facilities it assessed in 2025.
- Energy matters more in processing than in sewing. Fuels were 8.0% of output in spinning, weaving and finishing (NIC 131) against 1.9% in apparel. For a sewing unit, servo motors and switching off idle loads are the main energy moves. For a dye house, energy is a top-three cost.
- Government money exists for the energy moves. BEE's ADEETIE scheme (FY 2025-26 to 2027-28) covers textiles, with 3–5% interest subvention on energy-efficiency loans.
Where a garment unit's money goes: the ASI 2023-24 numbers
The Annual Survey of Industries is the government's census of registered factories. Its Table 5 for 2023-24 splits each industry's output into cost lines. For "wearing apparel, except fur apparel" (NIC 141) it covers 7,992 factories and about 8.99 lakh people engaged. (ASI 2023-24, Table 5, MoSPI, checked 20 Oct 2026.)
| Cost line (ASI 2023-24) | Apparel, NIC 141 (% of output) | Knitted apparel, NIC 143 (% of output) | Spinning, weaving, finishing, NIC 131 (% of output) |
|---|---|---|---|
| Materials consumed (fabric, yarn, trims, packing, stores) | 49.1% | 49.7% | 62.8% |
| Other inputs (incl. job work done by others, repairs, rent) | 20.8% | 25.6% | 13.6% |
| Fuels consumed (power, diesel, fuel for boilers) | 1.9% | 2.3% | 8.0% |
| Total emoluments (all employees) | 15.5% | 12.0% | 7.4% |
| Interest paid | 1.9% | 2.0% | 2.5% |
| Depreciation | 2.4% | 2.1% | 2.9% |
| Net profit | 6.75% | 5.0% | 2.2% |
Our calculation from ASI 2023-24 Table 5 (₹ lakh), each line divided by "value of output". Checked 20 Oct 2026.
First, ASI does not publish fabric as its own line for apparel. "Materials consumed" bundles fabric, thread, trims, packing and stores (ASI concepts and definitions, item 32, checked 20 Oct 2026). Trade guides put fabric alone at 50–70% of garment cost.
Second, "other inputs" includes the cost of contract and commission work done by others on the factory's materials, per ASI's definition of total input. Outsourced embroidery, printing and washing sit here. For knitwear units it is 25.6% of output, larger than the wage bill.
Third, average wages to workers in NIC 141 came to about ₹14,135 a month per worker in 2023-24 (₹13,144 crore ÷ 7.75 lakh workers ÷ 12). ASI's "wages" include overtime and allowances, so this is a gross figure, not basic plus DA.
The worked example: a 600-person unit
Assume a woven and knit garment exporter with 600 people, 500 machines on 20 lines and a turnover of ₹75 crore a year. That is below ASI's average output of about ₹16 lakh per person. Apply the NIC 141 shares:
| Line, assumed unit (₹75 crore turnover) | Share (ASI 2023-24) | ₹ per year |
|---|---|---|
| Materials | 49.1% | ₹36.8 crore |
| Other inputs | 20.8% | ₹15.6 crore |
| Emoluments | 15.5% | ₹11.6 crore |
| Fuels | 1.9% | ₹1.4 crore |
| Net profit | 6.75% | ₹5.1 crore |
Assume fabric is ₹30 crore of the ₹36.8 crore of materials; trims, thread and packing are the rest.
Six moves, priced in ₹
| Move | ₹ effect per year (assumed unit) | One-time cost (assumed) | Payback | Source for the mechanism | Government support |
|---|---|---|---|---|---|
| 1. Raise marker efficiency by 1 point on the high-volume markers (80% → 81%) | ~₹30 lakh (1.23% of the ~₹24 crore of fabric those markers cut, assumed 80%) | Marker-planner time; CAD if not owned | Weeks if CAD exists | 1 ÷ (E+1) rule, Apparel Resources cutting-room guide | MSME LEAN scheme: 90% of consultancy cost (status below) |
| 2. Cut re-cuts and part changes from 1.5% to 0.5% of fabric | ~₹30 lakh | Shade banding, roll inspection discipline | Months | Same guide lists "part change and rejection in sewing" as a fabric loss | — |
| 3. Halve the alteration loop on 20 lines | ~₹33 lakh | 2 roving in-line checkers, ~₹5 lakh a year | Under 3 months | IJERT 2020, Bengaluru suit plant | MSME LEAN scheme (status below) |
| 4. Cut the overtime run before ex-factory dates by a third | ~₹14 lakh | Planning time, no capex | Immediate | OSH Code s.27: 2× ordinary wages | — |
| 5. Servo motors on 300 clutch-motor sewing machines | ~₹9 lakh | ~₹21 lakh at ₹7,000 a motor fitted | ~2.2 years | Tekstilna industrija 2023 review: up to 70% less energy | ADEETIE: 3–5% interest subvention; TN Textile Policy 2025-26: 25% up to ₹10 lakh |
| 6. Switch off idle clutch-motor sewing machines, lights and compressors at breaks and shift end | ~₹1.5 lakh | Nil | Immediate | Idle machines and the energy bill | — |
All ₹ figures are our arithmetic on the assumed unit above. Rows overlap: fewer re-cuts also mean fewer alterations, and less rework means less overtime. Do not add them up and promise the total to your bank.
Together the six rows come to about ₹1.2 crore a year, close to a quarter of the assumed ₹5.1 crore net profit. Most of it sits in the cutting room and at the end-line table, not the meter room.
Fabric: the biggest lever, and the hardest to see
A marker's efficiency is pattern area divided by marker area. When it rises from E to E+1 percentage points, fabric needed falls by 1 ÷ (E+1). At 80% that is 1.23%, not 1%. The arithmetic and a two-unit example are in what 1% of marker efficiency is worth in ₹.
The CAD report covers only the marker. End loss per ply, end bits, splicing overlap and re-cuts sit outside it. Apparel Resources' cutting-room guide notes that 80% of garments are often cut by 20% of the markers, so start with the few markers that carry the volume.
The second fabric leak sits between store and cutting table; the check is in reconciling issued vs consumed fabric and trims.
Rework: the cost that hides inside wages
An altered garment costs re-sewing minutes, a second check and standard minutes the line never earned. They come out of the same wage bill, so the accounts never show a "rework" line.
The best Indian evidence we found is one factory. A 2020 IJERT study of a Bengaluru suit manufacturer reported a rework rate above 7%. After a traffic-light in-line inspection system, final-inspection DHU fell 47.6% and production efficiency rose 11.72%. The paper reported its cost-of-poor-quality figure falling from 1.79% to 1.04%, without stating the base. One plant over a few months is a demonstration, not a benchmark.
Row 3 of the moves table uses the illustrative alteration-loop figure of about ₹27,600 per line per month from end-line DHU and the alteration loop; the rework cost calculator runs it on your lines. A slipped ship date costs more: see what a missed ex-factory date costs and the late order cost calculator.
Overtime before ex-factory: double the rate, and an audit finding
In a garment unit, overtime bunches up in the last days before an ex-factory date. A line that fell behind on a new style, a late fabric lot or a gap after Diwali is run past shift end to make the vessel. Those hours cost double, and they are what buyer auditors look at first.
The Social & Labor Convergence Program (SLCP), the shared assessment many apparel brands accept in place of their own audits, ran about 10,700 assessments in 2025, 13% of them in India and about 70% in apparel and footwear facilities. Its 2025 Impact Report ranks overtime outside legal limits as the most common legal non-compliance, found in 52% of facilities; monthly overtime limits were breached in 45%. These are worldwide figures, not India alone.
The four Labour Codes took effect on 21 November 2025, and the Factories Act, 1948 was folded into the OSH Code (PIB release). The old s.59 double-rate rule now sits in OSH Code s.27. Overtime needs the worker's consent and is paid at twice the ordinary rate of wages. The Code on Wages, s.2(y) defines "wages" as basic pay plus DA and retaining allowance, and excludes HRA and conveyance. Your state's rules set the quarterly overtime ceiling.
Row 4 assumes basic plus DA of ₹12,000 a month. That gives an ordinary rate of about ₹58 an hour (÷26 days ÷8 hours) and an overtime rate of about ₹115. It also assumes 300 workers doing 2 hours of overtime on 60 days a year. That is 36,000 hours, or about ₹41 lakh. Cutting a third saves about ₹14 lakh. The overtime cost calculator and the labour cost per piece calculator run this on your own wages.
The bigger question is whether the hours were needed. The four signs to check are in overtime keeps rising: the work or the habit. Festival churn is a common cause: see operators who don't return after Diwali and Holi. The labour-codes guide for a 200–1000 worker plant covers the rules.
Energy: small in sewing, large in processing
For a stitching unit, fuel and power (1.9% of output) are the smallest of the four levers. For a dye house or weaving shed (8.0%), they belong near the top.
In a sewing hall, the main load is motors. A clutch motor runs at full speed all shift while the machine is switched on, whether or not the needle moves. A 2023 review in Tekstilna industrija (Vol. 70, No. 1) says servo motors give "up to 70% less energy consumption than traditional clutch motors". The paper is a review, not a measurement in an Indian unit.
Row 5 assumes an average clutch-motor draw of 0.25 kW and 8 hours a day for 300 days. It also assumes a 65% saving and ₹8 per unit all-in. That is about ₹3,100 a machine a year. Measure one machine with a clamp meter before you buy 300 motors.
BEE's ADEETIE scheme runs from FY 2025-26 to FY 2027-28 across 60 industrial clusters and lists textiles among its 14 sectors. It gives 5% interest subvention to micro and small units and 3% to medium units, on loans of ₹10 lakh to ₹15 crore. The project must achieve and sustain at least 10% energy savings. Check whether your cluster is on its list.
In Tamil Nadu, the Textile Policy 2025-26 (para 4.7) pays 50% of a resource-efficiency audit up to ₹3 lakh. It also pays 25% of the recommended conservation equipment, up to ₹10 lakh.
Lean consultancy support, open to any MSME
The MSME Competitive (LEAN) Scheme pays 90% of the lean consultancy cost for Udyam-registered units, on a cost of up to ₹1.2 lakh (intermediate) or ₹2.4 lakh (advanced) plus taxes (2022 guidelines). The Lean guidelines print 31 March 2026 as the end of financial support. No extension notice was found on msme.gov.in or dcmsme.gov.in, though the lean.msme.gov.in portal still took registrations (checked 20 Oct 2026). Confirm with your MSME-DFO in writing before you count on the subsidy.
What cameras can see here, and what they can't
| Question | Floor camera | Needs other data |
|---|---|---|
| Are spreading tables idle, or lays waiting for the cutter? | Yes | — |
| Is the end-bit sack or re-cut pile growing? | Yes | — |
| Marker efficiency, end loss in cm | No | CAD report, cut-order reconciliation |
| Is the alteration pile growing at 11 am? | Yes | — |
| DHU, defect type, root cause | No | QC sheets |
| How many people are on the floor after shift end (aggregate) | Yes | — |
| Is that overtime legal and correctly paid? | No | Attendance and wage registers |
| Lights and machines on in an empty bay | Yes | — |
| kWh per machine | No | Clamp meter, sub-meter |
Keep any camera reading at the level of lines and hours, never individual operators, and tell workers what the cameras are for. A template is in the worker CCTV notice under DPDP.
Where Mama fits
Mama reads the cameras a factory already has, or a few it adds, and each morning sends the owner a short note on where hours and money leaked the day before. It reports by line and by hour, never by person. The output side of the same floor is covered in make more from the lines you already pay for. Leave an email or phone in the form below and Mama will get back to you.
FAQ
What is the biggest cost in an Indian garment factory?
Materials. In ASI 2023-24, materials consumed were 49.1% of output value for apparel factories (NIC 141) and 49.7% for knitted apparel (NIC 143). Fabric is the largest part of that.
Is energy a big cost for a garment unit?
Not for a stitching unit. ASI 2023-24 puts fuels consumed at 1.9% of output in apparel factories, against 8.0% in spinning, weaving and finishing.
Is there a government subsidy for saving energy in a textile unit?
Yes. BEE's ADEETIE scheme covers textiles to FY 2027-28, with 3–5% interest subvention on energy-efficiency loans in 60 listed clusters. Some states add their own, such as Tamil Nadu's Textile Policy 2025-26.
Which cost should a garment owner cut first?
Usually fabric. One point of marker efficiency on high-volume markers is worth more than 1% of fabric, and fabric dwarfs every other line. Rework comes next. Before buying a new line, compare a new line with more efficiency on the old ones.
How is overtime paid in India after the Labour Codes?
At twice the ordinary rate of wages under OSH Code s.27, with the worker's consent. "Wages" under the Code on Wages means basic plus DA and retaining allowance, not gross pay. Your state's rules set the quarterly ceiling.