The textile industry witnessed a downtrend in exports in November 2023, despite the opening of markets in western countries on account of the festive season, with readymade garments—a mainstay of the textile export portfolio—experiencing an 15% decline.
The industry experts are hopeful that trend will reverse in coming months when purchase orders for summer clothes will start coming from western countries, given that Indian cotton-based wearables are high in demand in foreign countries. The major exporting destinations for Indian garments are European Union, the US and the middle east countries.
According to the government data, readymade garments experienced an 15% decline, with export figures dropping from $10.36 billion in April-November 2022 to $8.84 billion in the corresponding months of 2023. This dip raises questions about the evolving consumer preferences, market dynamics, and global economic conditions influencing the demand for fashion and apparel.
Export of jute manufacturing, including floor covering, reduced to $234 million in April-November 2023 from $303 million in the last fiscal in same period, ballooning the trade deficit by 23% (y-o-y) and 24% month-on-month in November 2023 as per the quick estimates released by the commerce ministry.
Amidst an overall downtrend in November 2023, there are notable exceptions, providing insights into the industry’s resilience and adaptability as cotton yarn and handloom products, in particular, emerged as beacons of growth, recording a commendable 6% increase during this period.
“For Indian textile industry, European Union, the US and the middle east are the main markets. There are specific reasons for decline in the textile trade. EU is yet to get over from the ongoing Ukraine-Russia war that has impacted the retail sale,” said Rahul Mehta, President of Clothing Manufacturers Association of India (CMAI).
“The demand from the middle east is down due to ongoing Israel-Gaza war. The US market is performing well and we are hopeful of correcting export figures in upcoming months,” he said, adding “the decline in November is attributed to pre-winter season as we are not much in winter cloth manufacturing for global markets.”
The quick estimates recently released by the commerce ministry indicate a 21% month-on-month increase in the trade deficit, emphasizing the need for a comprehensive understanding of the forces at play in the international trade arena.
Export of handicrafts items dropped from $1.16 billion in April-November 2022 to $1.04 billion in the first eight months of the current fiscal, registering negative growth of 10%.
India is among the top garment-manufacturing countries in the world. India is one of the largest consumers and producers of cotton with the highest acreage of 13.5 million hectares, which is 38% of the global area under cotton cultivation, as stated by Indian Brand Equity Foundation (IBEF), a body established by the ministry of commerce and industry.
India’s textile and apparel market size is growing at a CAGR of 14.59% from $172.3 billion in 2022 and is expected to reach $387.3 billion by 2028, the IBEF report said, adding the industry is one of the biggest contributors to the economy with a 2% contribution to the GDP.
The textile industry is also the second largest employer after agriculture, providing direct employment to 45 million people and 100 million people in the allied sector. Andhra Pradesh, Telangana, Haryana, Jharkhand and Gujarat are the top textile and clothing manufacturing states in India.
