Global recession is knocking at the doors of Indian textile industry. The impact of recession is clearly visible on new orders received by the Indian exporters. Industry bodies and businessmen said export orders of garments and home textiles from the US and Europe have declined by about 15-20 per cent, as western retail brands are facing slow demand.
In Panipat, an important production hub of home textiles, there are indications of decline up to 40 per cent in export orders. It is believed that inflation caused due to the Russia-Ukraine war, and hike in interest rates are responsible for the recession and fewer export orders.
Industry sources said that importers from western countries have not only reduced orders for the next season but also postponed the deliveries of previous orders. Last month, importers of several home textile exporters refused to take delivery. Buyers said that retail sales in western countries slowed down significantly due to high inflation. The warehouses are full of unsold goods. Therefore, it is not possible for them to take delivery immediately.
Exporters from Panipat, who returned after participating in the trade fair held in Germany in June, said that they have received 40 per cent lower export orders for home textiles compared to last year.
Ramesh Verma, Panipat based exporter and member of the Handloom Export Promotion Council told, “Large companies and retail brands from the US and Europe had procured home textile products in excessive volume last year. But retail sales remained very weak. Therefore, they have to reduce their buying. The exporters are having fewer orders for next season.”
Apparel Export Promotion Council Chairman Narendra Goenka had earlier said that apparel export orders are estimated to decrease by about 15-20 per cent. In fact, the current situation around the world remains uncertain. Foreign buyers are cautious for placing new orders.
The exporters are currently placing orders for Christmas and next summer season. A Tiruppur exporter said that the impact of recession is clearly visible on the export orders of the textile sector. In western countries, general consumers do not have enough money to buy textile products and other discretionary items because of inflation and adverse economic conditions.
However, some experts are hopeful that the situation will improve in the months to come. Foreign buyers have mostly placed orders for upcoming Christmas this December. The buyers import winter items from other countries instead of India. Indian exporters get more orders for summer season. If the global economic situation improves, export orders may increase.