India Orders To China, Home Textile Industry Stand On The Tuyere!

Introduction: India missed RECP in order to protect the interests of textile, steel and other major manufacturing industries. However, due to the impact of the new crown epidemic, many large export-oriented textile enterprises in India can not guarantee the normal delivery, clothing orders return to China, and the domestic textile industry stands at the top. According to the statistics of Tonglian, in the first three quarters of 2020, the cumulative export of textile and clothing reached 215.78 billion US dollars, an increase of 9.3%.

It is also the world's two largest textile bases in developing countries and China. After the new crown epidemic, India's textile industry suffered a heavy setback, Chinese enterprises took advantage of the situation to expand, and the global textile industry undercurrent surged under the Dragon elephant dispute.

India is the world's largest cotton producer, the world's largest jute producer, the world's second largest silk producer, and its yarn production capacity accounts for 22% of the world. In 2019, the size of India's textile and clothing market is about 250 billion US dollars. The textile and clothing industry is also one of the largest sources of foreign exchange income in India, accounting for about 15% of India's total export revenue. India's main advantage in the textile industry is that it can provide all types of natural and man-made fibers, as well as a large number of cheap labor.

Since the outbreak of the epidemic, India has not done a good job in prevention and control. From June to now, the number of cases has increased exponentially. According to the data, on November 25, 44376 new cases were confirmed, 9266705 cases were confirmed, 135261 people died and 8679138 people were cured.

Out of control of the epidemic has undoubtedly brought unprecedented pressure to India's labor-intensive industry textile industry. Since September, many large export textile enterprises in India have been unable to guarantee normal delivery due to the epidemic situation, and many orders originally produced in India have been transferred to China for production.

At the same time, a number of Chinese textile companies have received a large number of orders from India, and the domestic textile industry stands on the wind.

In the past five years, China's textile and clothing industry's export has maintained a steady growth, with the export volume remaining above 270 billion US dollars. In the first three quarters of 2020, the cumulative export of textile and clothing reached US $215.78 billion, an increase of 9.3%.

In the first three quarters of 2020, China's textile exports exceeded clothing exports for the first time. The growth of textile exports was mainly affected by the epidemic situation. The export volume of anti epidemic materials such as masks and protective clothing increased significantly.

From the Keqiao Textile index, we can see that after July, the foreign trade boom index rose rapidly, indicating the booming demand from the international market.

From the perspective of the fundamentals of Listed Companies in the textile industry, the operating revenue and net profit have increased significantly. Taking 10 listed textile companies as an example, according to the Tonglian data statistics, the operating revenue of textile companies in the first three quarters of 2020 will increase by 157.32% compared with the same period last year, and the net profit will increase by 155.51% compared with the same period last year.

According to the National Bureau of statistics, in the third quarter of this year, the business income of domestic textile enterprises above designated size increased by 5.28% year on year. In the first three quarters, the total profit of home textile enterprises above designated size increased by 20.14% year-on-year, and the profit margin was 5.07%; among them, the total profit of the third quarter increased by 45.68% year-on-year, with a profit margin of 5.99%. In September, the total profit increased by 120.61% year-on-year, and the profit margin reached 7.86%.

If the epidemic situation in India can not be effectively controlled, China's textile enterprises will seize the opportunity to expand. The Dragon elephant debate in the textile industry may give birth to unique opportunities.