How Affected Is India'S Textile Industry Affected By The Epidemic?

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. The cotton and chemical fiber output accounts for 23% and 9% respectively in the world, and the spinning capacity accounts for about 22% of the world. India's textile and clothing exports rank second and third respectively in the world. According to the United Nations statistics, in 2019, India exported 35.49 billion US dollars of textiles and clothing to the world. Textile industry is an important livelihood industry and foreign exchange earning industry in India. It contributes about 7% of India's industrial output value and 15% of its export volume every year, and its direct employment exceeds 45 million.

As a result, the textile industry in India has been shut down due to the increase of the epidemic situation and the closure of the textile industry. India's economy began to recover gradually since it was unsealed in different stages in June. However, at present, the epidemic situation has been aggravated. Affected by labor, supply chain and other factors, many export enterprises are unable to start production normally and ensure timely delivery, resulting in the loss of export orders.

According to the data of the Ministry of Commerce and industry of India, in April 2020, the export volume of India's textiles and clothing shrank by 87.5% year-on-year. Since then, the decline has narrowed month by month. In September, the textile and clothing export volume increased by 10% year-on-year, which is the first time that the monthly export volume of this fiscal year (from April 1, 2020-2021) has achieved positive growth, while the cumulative export volume has not reversed the negative growth trend. From April to September 2020, India exported 10.97 billion US dollars of textiles and clothing, a year-on-year decrease of 31.7%. From the perspective of product category, clothing export, which accounted for 43.6% of India's total textile industry export, had the largest decline. From April to September, India exported 4.78 billion US dollars of clothing to the world, a year-on-year decrease of 39.3%; the export of chemical fiber textiles (accounting for 13.2% of India's total textile and clothing exports) also decreased significantly, with a year-on-year decrease of 38.7% from April to September; Cotton textiles (36.6% of exports) and carpets (5.4% of exports) showed a relatively low decline, with exports decreasing by 19.5% and 14.4% respectively. Affected by the suspension of production and the decline of export, the production of Indian textile industry has also greatly slowed down. According to the data of the Ministry of statistics and planning implementation of India, in April 2020, India's textile and clothing production fell by 90.8% and 94.1%. As the severity of the epidemic has not been alleviated, the production has not yet resumed growth and has the potential to slow down again.

Affected by the epidemic, the prospect of Indian textile industry is still not optimistic. At the beginning of the outbreak, the growth of cases in India was relatively slow, but the situation began to repeat from the second half of the year. In mid September, the number of confirmed cases in India increased by more than 70000. The media reported that the production capacity of its textile factories had been greatly reduced, which made it difficult to steadily undertake international market orders. Statistics show that the United States and the European Union are the most important export markets of India's textile industry. In 2019, India's textile and clothing exports to the United States and the European Union accounted for 23.8% and 19.3% of its total textile and clothing exports respectively.

Since May, the economy of the United States and Europe has gradually restarted, and the consumption of textile and clothing products has begun to recover. The retail sales since the second half of the year have recovered to about 85% of the same period in 2019. As the inventory of brand merchants was compressed to a low level in the early stage, the arrival of Christmas, Black Friday and other consumer peak seasons prompted brand companies to place orders one after another. However, the aggravation of the epidemic situation led to India's failure to fully grasp the current wave of orders, and the development pressure of textile industry was still prominent. In mid October, ICRA, a rating agency, said that the sales revenue of Indian garment exporters is likely to drop by 20% - 25% in the fiscal year 2020-2021, while the revenue of manufacturers focusing on India's domestic market is expected to decline by 30% - 40%.

Due to the remarkable effect of epidemic prevention and control in China, China's textile industry chain and supply chain gradually returned to normal operation from the middle and late April. After the restart of the U.S. and European markets, the orders of China's export enterprises rebounded, and the total export volume of the textile industry also turned negative to positive in the second half of the year, and showed a trend of gradually accelerating growth. According to the investigation of the professional association affiliated to China Textile Federation, due to the fact that South Asian factories can not guarantee on-time delivery, some textile enterprises in China have indeed received orders transferred from brands from India, Bangladesh, Sri Lanka and other countries, among which the orders for towel, bedding and other home textiles are relatively large.

China has made great achievements in epidemic prevention and control, which provides fundamental support for the development of textile industry. Compared with South and Southeast Asian countries, China's textile industry has the advantages of complete industrial system and stable supply capacity, which is particularly prominent under the epidemic situation. But from the long-term trend, manufacturing costs, international trade environment and other factors that affect the adjustment of international textile industry layout still have no fundamental changes. Xinguan epidemic will also have an important impact on the layout of international textile supply chain. The trend of more vertical and decentralized distribution of industrial chain and supply chain is expected to be inevitable. The path of China's textile industry to participate in the construction of international industrial division of labor and resource allocation system under the "double cycle" pattern is bound to be further adjusted. Generally speaking, for orders transferred from South Asia, on the one hand, it is necessary to guarantee product quality, provide good customer service and maintain good goodwill; On the other hand, it is also necessary to objectively understand that short-term order backflow can not represent the long-term development trend. It is still the fundamental development direction of China's textile industry to firmly promote transformation and upgrading, continuously improve labor productivity, resource allocation efficiency, independent innovation ability, and steadily optimize the division of labor position in the international industrial chain and supply chain.