Textile Sector - Weaving A Way Out Of A Slump

While India's textile sector has been facing recessionary challenges over the past year, exporters are looking forward to the Christmas season in this quarter to alleviate the ongoing downturn. Industry experts believe that they will end the year on a positive note and see an 8-10 per cent rise in the near future

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Last year, the textile sector weathered a challenging combination of factors, akin to a perfect storm. This included a slowdown in demand from export markets due to surging inflation, disruptions in the supply chain caused by the Russia-Ukraine war which affected inventory levels and the substantial increase in commodity costs that placed significant pressure on profit margins. The situation has not improved even in the first three months of the current fiscal. Inflation and economic slowdown in advanced economies, coupled with piled-up inventory since the pandemic, have caused India’s apparel export clients to defer orders or request lower prices.

The first three months of this fiscal saw apparel exports decline by around 23 per cent, 13 per cent and 17 per cent in April, May and June, respectively. The quarter as a whole saw a 17.7 per cent year-over-year dip to USD 3.69 billion in 2023 from shipments worth USD 4.49 billion in 2022. However, in the wake of these adverse circumstances, the sector is now displaying early signs of recovery. Exporters are looking forward to the Christmas season in this quarter to alleviate the ongoing slump. Industry experts believe that they will end the year on a positive note and see an 8-10 per cent rise in the near future. In the next few months, both readymade garments and home textiles will see growth.