But there is rarely enough to cover even these costs. Through these contracts, factories can pay their gas and electricity bills and cover at least part of workers' salaries. Typically a factory keeps about 38 percent of the processed fabric to sell on its own under tolling contracts, while the rest goes to the trading firms that supply the cotton. The situation is getting worse because in several regions including Ivanovo, almost every town is dependant on a single textile factory. If they close, people will be without work.
People come to work because there is nowhere else to go.
The surge of foreign imports, which now make up the vast majority of clothes purchased in Russia, is also harmful to the Russian textile industry. The flood of imports, particularly from the European Union is increasing. The European Union currently has quotas in place against Russian textiles. In July 1997, Russian Prime Minister Viktor Chernomyrdin threatened to impose retaliatory trade restrictions on European textiles unless Brussels agrees to lift quotas on Russian imports. The European Union quotas limit Russian textile imports to USD 140 million per year, while European Union nations currently export about USD 750 million worth of textile into Russia each year.