India is one of the few countries in the world with a relatively complete textile manufacturing industry chain. It is the second largest cotton producer and the second largest chemical fiber producer in the world. Its cotton and chemical fiber output account for 23% and 9% of the world respectively. Yarn production capacity accounts for approximately 22% of the world. India’s textile and clothing exports rank second and third in the world respectively. According to United Nations statistics, India exported a total of US$35.49 billion in textiles and clothing to the world in 2019. The textile industry is an important livelihood industry and foreign exchange-earning industry in India. It contributes approximately 7% of India’s industrial output value and 15% of its exports every year, and directly employs more than 45 million people.
After the outbreak of the new coronavirus pneumonia, India adopted blockade measures to prevent and control the epidemic. Production activities were suspended and ports The shutdown has had a strong impact on the textile industry chain. The startup rate of textile enterprises has dropped, closures have increased, and the unemployment rate has continued to rise. Since the phased unblocking began in June, the Indian economy once began to gradually recover. However, the spread of the epidemic has intensified. Affected by multiple factors such as employment and supply chains, many export companies are unable to start production normally and ensure on-time delivery, resulting in export Orders are lost.
According to data from the Indian Ministry of Commerce and Industry, in April 2020, India’s textile and apparel exports shrank sharply by 87.5% year-on-year. Since then, the export decline has narrowed month by month. In September, textile and apparel exports The export volume increased by 10% year-on-year. This is the first time that the monthly export volume has achieved positive growth in this fiscal year (India’s 2020-2021 fiscal year starts on April 1). The cumulative export volume has not yet reversed the negative growth trend. From April to September 2020, India exported a total of US$10.97 billion in textiles and clothing, a year-on-year decrease of 31.7%. From the perspective of product categories, clothing exports, which accounted for 43.6% of India’s total textile industry exports, experienced the largest decline. From April to September, India exported a total of US$4.78 billion in clothing to the world, a year-on-year decrease of 39.3%; chemical fiber textiles (accounting for 13.2% of India’s total textile and clothing exports) %) export decline is also more obvious, with exports decreasing by 38.7% year-on-year from April to September; exports of cotton textiles (exports accounting for 36.6%) and carpets (exports accounting for 5.4%) have relatively low declines, with exports decreasing year-on-year respectively. Decreases of 19.5% and 14.4%. Affected by shutdowns, production cuts and declining exports, India’s textile industry production has also slowed down significantly. According to data from the Indian Ministry of Statistics and Plan Implementation, in April 2020, India’s textile and clothing production fell by 90.8% and 94.1%. Due to the severity of the epidemic, the Seeing relief, production has not yet resumed growth and is likely to slow down again.
Figure 1: India’s cumulative growth rate of textile and garment exports since fiscal year 2020-2021
Note: India’s fiscal year runs from April 1 of each year to March 31 of the following year.
Data source: Ministry of Commerce and Industry of India
Figure 2: Monthly year-on-year growth rate of textile and apparel production in India since fiscal year 2019-2020
Data source: Indian Ministry of Statistics and Plan Implementation
Affected by the epidemic, Indian textile industry The industry outlook is still not optimistic. In the early days of the epidemic, the growth of cases in India was relatively slow, but the situation began to reverse in the second half of the year. In mid-September, the number of daily confirmed cases in India exceeded 70,000. The media reported that the production capacity of its textile factories was significantly reduced, making it difficult to steadily accept orders from the international market. Statistics show that the United States and the European Union are the most important export markets for the Indian textile industry. In 2019, India’s textile and apparel exports to the United States and the European Union accounted for 23.8% and 19.3% of its total textile and apparel exports respectively. Since May, the economies of the United States and Europe have gradually restarted, and the consumption of textile and clothing products has begun to recover. Since the second half of the year, retail sales have recovered to about 85% of the same period in 2019. As brand owners’ inventories were compressed to a low level in the early stage, the arrival of peak consumer seasons such as Christmas and Black Friday prompted brand owners to place orders one after another. However, as the epidemic worsened, India failed to fully grasp this wave of orders, and the development pressure on the textile industry remained prominent. Rating agency ICRA said in mid-October that sales revenue of Indian apparel exporters may drop by 20% to 25% in the fiscal year 2020-2021, and the revenue of manufacturers focusing on the Indian domestic market is expected to drop by 30% to 40%.
Figure 3: Year-on-year growth in clothing retail sales in the United States and the European Union
Data source: U.S. Census Bureau, Eurostat
Due to the remarkable results in domestic epidemic prevention and control, my country’s textile industry chain and supply chain gradually resumed normal operation from mid-to-late April. . After the U.S. and European markets restarted, orders from my country’s export companies rebounded, and the total export volume of the textile industry also turned negative to positive in the second half of the year, showing a trend of gradually accelerating growth. According to research by the professional association affiliated to the China Textile Federation, because factories in South Asia cannot guarantee on-time delivery, some textile companies in my country have indeed received orders transferred from brand owners from India, Bangladesh, Sri Lanka and other countries. Among them, orders for home textiles such as towels and bedding are relatively small. Too much.
my country has achieved significant results in epidemic prevention and control, providing fundamental development support for the textile industry. Compared with countries in South Asia and Southeast Asia, my country’s textile industry has complete products.The advantages of the system and stable supply capabilities are also particularly prominent under the epidemic. However, from a long-term trend perspective, manufacturing costs, international trade environment and other factors affecting the adjustment of the international textile industry layout have not fundamentally changed. The COVID-19 epidemic will also have an important impact on the layout of the international textile supply chain. The trend of more vertical and decentralized industrial and supply chain distribution is expected to be inevitable. my country’s textile industry will participate in the international industrial division of labor and resource allocation system under the “dual cycle” pattern. The path of construction will inevitably be further adjusted. Generally speaking, for orders transferred from South Asia, on the one hand, we must ensure product quality, provide good customer service, and maintain good goodwill; on the other hand, we must also objectively understand that short-term order return does not represent long-term development trends, and firmly Promoting transformation and upgrading, continuously improving labor productivity, resource allocation efficiency, independent innovation capabilities, and steadily optimizing the division of labor in the international industrial chain and supply chain are still the fundamental development directions of my country’s textile industry.
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