Apparel and textile production witness steep declines following drop in export orders

NEW DELHI : India’s garment manufacturing industry has experienced a significant decline in recent months, with a staggering 22.6% drop between April and August 2023 compared to the same period last year. This decline can largely be attributed to a sharp decrease in exports and subdued demand both domestically and globally. The textile sector has also witnessed a decline of nearly 2% during this time frame.

According to data compiled by the Confederation of Indian Textile Industry (CITI), textile production did show a marginal improvement of 1.6% in August, but the cumulative index for April to August revealed an overall decline. The index for “wearing apparel,” which refers to garments, experienced a notable drop of 17.1% in August and a substantial 22.6% decline from April to August 2023, as compared to the corresponding period in the previous year.

However, despite the overall decline, there has been a glimmer of hope in the form of textile exports, which grew by 11.06% in September 2023 compared to the previous year. On the other hand, apparel exports witnessed a decline of 11.23% in the same month.

Some textile exporters attribute this decline in manufacturing and exports to various factors, including the government’s recently implemented Quality Control Order. This order mandates a Bureau of Indian Standards certification for man-made fibres, even those that are imported. As a result, textile manufacturers have struggled to source the required raw materials that meet the government’s specifications in international markets, leading to a steep decline in exports.

Mr. KM Subramanian, President of the Tiruppur Exporters’ Association, stated that many garment exporters have reduced workers’ shifts and discontinued overtime production to cope with the challenging situation. He emphasized that while there is a loss in production, there have been no significant job losses thus far. Subramanian expressed optimism about the recent announcement of a drawback in duty hikes, hoping that it will help revive exports and alleviate the prevailing situation.

Mr. Rahul Mehta, Chief Mentor of the Clothing Manufacturers Association of India (CMAI), explained that the domestic market has been slow since mid-March. Mehta anticipates slightly higher sales during the festival season compared to August-September, but overall growth is expected to be flat compared to last year. He speculated that sales may pick up after the Deepavali festivities during the wedding season. However, Mehta cautioned that if the low production trend continues for several more months, there may be significant job losses in the industry.