Rating agency Ind-Ra has revised the outlook on India’s textile sector to negative from stable for 2020-21 as weak domestic demand growth, threat of cheap imports and dwindling incentives and exports are likely to keep volumes muted.
Ind-Ra expects withdrawal of incentives under the merchandise exports from India scheme (MEIS) to affect export of home textiles and garments. However, it expects key raw material prices to remain low in 2020-21, after a correction in 2019-20.