India’s textile and apparel industry saw an 11.3% reduction in exports in June 2023 compared to the previous year while several mills continue to face acute cash loss, the Hindu reported. Several mills in the South also suspended production citing lack of demand, the report said.
Export of cotton yarn, fabrics, made-ups and handloom products slid by 1.21% year-on-year (y-o-y), shipment of man made products saw a 17.22 % decline while jute products and carpets plunged by 26.72 % and 15.43% respectively, according to data shared by the Confederation of Indian Textile Industry (CITI).
Textile exports in June 2023 were worth $1,624 million ($1,736 million in June 2022) while apparel exports were worth $1,248 million as opposed to $1,501 million last year.
Siddhartha Rajagopal, executive director of Cotton Textiles Export Promotion Council, told the Hindu that export of cotton products was expected to pick up in the next two months as the month-on-month rate of decline had reduced in June.
Meanwhile, smaller textile mills in Tamil Nadu were suspending production due to lack of orders, the Hindu reported. K.M. Subramanian, president of Tiruppur Exporters Association, said the smaller companies were the worst affected in the Tiruppur cluster.
“Factors such as slowdown in the U.S. and EU and lack of cost competitiveness were affecting textile and clothing exports. The yarn that should be exported is coming into the domestic market. There is already excess capacity in the country. These were among the factors affecting the textile industry,” said CITI chairman T. Rajkumar.
Ravi Sam, chairman of Southern India Mills’ Association, pointed out that a free trade agreement with the UK would grant immediate relief to the Indian textile industry. “We are expensive because of 9% to 11% duty in the UK market. If India gets duty-free access, there will be a steep jump in orders for garment and made-up exporters from their existing customers. This will revive demand,” the Hindu quoted him as saying.
Rajkumar also said that an industry that worked for 3-6% profit is currently incurring 5-10% loss. “All mills are suffering cash loss. The crisis has turned acute in the last two months,” he added. The industry has sought the removal of 11% import duty on cotton, moratorium on repayment of principal amount and Emergency Credit Line Guarantee Scheme loans, the Hindu report said.
