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“It is really a mystery. No one has a clear understanding of the sustained low demand. However, Russia-Ukraine war, high global inflation and changes in the domestic lifestyle may be responsible for the present sluggish scenario in the sector,” Sanjay Jain, managing director of TT Limited and former chairman of Confederation of Indian Textile Industry (CITI) told Fibre2Fashion.
Ashish Gujarati, former President of South Gujarat Chamber of commerce and Industry (SGCCI) has said that higher compliance in various industries could be the reason for record GST collection. The new tax regime pushed industry hard through strict provisions to pay tax on their business. He said that better PMI shows good state of Indian manufacturing activities. However, slower export demand is causing weak sentiments in the textile industry. Domestic demand can support the textile value chain, but it has certain limitation. Despite high economic growth and prosperity in the country, consumers have limited purchasing capacity which is detrimental for textile and apparel industry.
Ravi Sam, chairman, Southern India Mills Association (SIMA), said that India in terms of exports and manufacturing activities, is doing well. But the textile industry is reeling under long drawn recession due to sluggish demand for textiles and clothing products. He also blamed costlier Indian cotton for the present sluggish demand. He explained that 11 per cent import duty is applicable on cotton fibre. Domestic prices of the fibre compete with the cost of imported supplies which supported domestic prices at a higher level. Indian cotton is traded 10-13 per cent higher than the global prices. Therefore, Indian exports became uncompetitive in the global market. Indian exports dropped around 23 per cent during last year.
Apart from industry bodies, trade community also feels the disparity of Indian cotton and global slowdown is responsible for slower demand. Gulshan Kumar Jain, a trader from Ludhiana, said, “India has 30-40 per cent additional capacity in textile sector which can be absorbed by only export demand. While Indian exports have become uncompetitive due to costlier cotton. Global challenges are also a cause for concern for the industry.”
Another trader from the Delhi market said that some other sectors might be performing better in domestic industries, driving GST collection and PMI. However, the textile sector faces challenges on both domestic and global fronts. The Indian textile industry is more dependent on export demand compared to other industries.
Fibre2Fashion News Desk (KUL)