July , 2020
Hard times for textile industry
16:16 pm

Kuntala Sarkar



The nationwide lockdown has left a direct impact on the textile industry. The sector offers employment to more than 45 million people in India and has a large number of segments like fabric supply, dyeing, labelling, light metallic clothing accessories manufacturing and ancillary textile equipment manufacturing.

Slump in demand and production fall

As a large number of citizens mostly stayed indoors during the lockdown, the demand for clothes reduced significantly. India's textiles and apparel production sector has declined by around 10%-12% in the first quarter (April-June) of 2021. The Clothing Manufacturers Association of India (CMAI) has recently done a survey among its members and noted 1,500 responses. The survey revealed that almost 20% of them are planning to close down their businesses after the lockdown because of the incurred losses. The revenue fall for this sector is anticipated to be around 40%.

Designer Surbhi Pansari told BE, “The industry is looking at ways to adapt to the current scenario. Apparels have dropped off the shopping list by 40%-50% approximately. People will resort to careful shopping. In that situation, I would stress on need of supporting the artisans and the craft community who are the backbone of our business. I believe the focus will be on sustainable fashion in future. We are crafting garments which are affordable, focusing on simpler aesthetics.” Few other textile companies are also introducing online flash sales to meet their need of liquidity.

Export and import affected

In the last fiscal, the textile industry contributed to around 15% of the total export earnings in India. In the last three years, India’s export to the world was more than $16 billion. However, the coronavirus outbreak has changed the scenario. Many prominent players in the Indian textile industry has reported that many of their buyers did not pay. Additionally, Indian exporters have faced a high number of cancellations from importers. So, the Indian apparel sector has an amount of piled-up stocks.

The small and medium scale businesses were mostly impacted. Many of them faced huge losses in the forex cover as they did not get the bills on time and had to pay penalties. To minimise these issues, Smriti Irani, the Indian textile minister sent an appeal from the Apparel Export Promotion Council (AEPC) to importers, requesting them not to cancel previous orders.

India annually exports cotton yarn to China worth around $460 million and imports synthetic yarns from China worth $360 million. India also imports textile items worth over $140 million. In the present situation, India will face a shortage of supply of these items as the domestic supply is not adequate to meet the demand. A recent KPMG study noted, “With lockdown in China, price of man-made fibre imports is expected to rise significantly, resulting in higher price for some goods in the domestic market.”

The shortage of supply from China is expected to increase the production cost of apparels by 3%-5%. But to pick a positive note, the Indian domestic textile industry can expand in absence of the required imports from China.

Impact in employment

Around 80% of the sector that comes under Micro, Small and Medium Enterprises (MSMEs) needs close attention and revival packages from the government. As manufacturing is being hampered and demand is limited, employment in the sector will be impacted. Rahul Mehta, Chief Mentor, CMAI, recently stated that they are estimating as much as one crore job cuts in the textiles sector - owing to the lockdown. Contractual and daily wage-based labourers will be the major targets of layoffs and pay cuts.

Emerging trends

The nationwide slump in domestic demand for apparels and closure of malls is leading to new trends. Around 40% of the factories that are currently operational are making Personal Protective Equipment (PPE) and masks. Designed masks are expected to be a part of the new normal lifestyle.

Another noticeable emerging trend is the popularity of the anti-viral fabric. Shiva Texyarn recently launched a fabric treated with HeiQ Viroblock NPJ03 – which is believed to deactivate viruses including coronavirus in the shortest possible time. The company has claimed it is the first-of-its-kind antiviral fabric in the Indian market.

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