Textile and apparel exports shrank 11.3 percent in June compared with the year-earlier period even as several textile mills in the South suspended production on account of tepid demand.
Export of cotton yarn, fabrics, made-ups and handloom products slid 1.21 percent year-on-year (y-o-y). Shipment of manmade products saw a 17.22 percent decline while export of jute products and carpets plunged 26.72 percent and 15.43 percent respectively, according to data shared by the Confederation of Indian Textile Industry.
While textile exports in June were worth $1,624 mn ($1,736 mn in June 2022), apparel exports were to the tune of $1,248 mn ($1,501 mn).
Siddhartha Rajagopal, executive director of Cotton Textiles Export Promotion Council, said export of cotton products was expected to revive in two months as the rate of decline month-on-month in June for cotton textiles had reduced to (-) 1 21 percent.
Meanwhile, smaller textile mills in Tamil Nadu were suspending production due to lack of orders.
K.M. Subramanian, president of Tiruppur Exporters Association, said the smaller companies were the worst affected in the Tiruppur cluster.
“Factors such as slowdown in the U.S. and EU and lack of cost competitiveness were affecting textile and clothing exports. The yarn that should be exported is coming into the domestic market. There is already excess capacity in the country. These were among the factors affecting the textile industry,” said T. Rajkumar, chairman of Confederation of Indian Textile Industry.
Ravi Sam, chairman of Southern India Mills’ Association, said if Free Trade Agreement is signed with the U.K., there will be immediate relief for Indian textile and garment exports. “We are expensive because of 9 percent to 11 percent duty in the U.K. market. If India gets duty-free access, there will be steep jump in orders for garment and made-up exporters from their existing customers. This will revive demand,” he said.
An industry that worked for 3 percent to 6 percent profit is currently incurring 5 percent to 10 percent loss, they said. “All mills are suffering cash loss. The crisis has turned acute in the last two months,” said Mr. Rajkumar. The industry has sought the removal of 11% import duty on cotton, moratorium on repayment of principal amount and Emergency Credit Line Guarantee Scheme loans.