scorecardresearch

Textile industry pins hope on festival season for demand revival

Textile units in neighbouring Bangladesh, Sri Lanka and even China are facing challenges of slowing global demand, energy crisis.

Textile Gujarat
Textile players in India foresee huge opportunities on the exports front too.

By Nayan Dave

The upcoming festive season and exports opportunities emerging from the crisis-ridden textile sectors in neighbouring countries may help the textile industry in India battle the declining global demand.

Chintan Parikh, chairman of Ahmedabad-based Ashima Group, said, “Textile industries of Bangladesh and Sri Lanka are in complete doldrums both on account of political instability and their complete reliance on exports for survival. This is a great opportunity for the Indian textile industry.” According to him, textile units in neighbouring Bangladesh, Sri Lanka and even China are facing challenges of slowing global demand, energy crisis, political instability and new policy of China plus one strategy adopted by the US and Western European nations.

In this situation, textile players in India foresee huge opportunities on the exports front too. “The USA and Western European nations are exploring alternatives post the Covid-19 outbreak in order to reduce their exposure on Chinese exports. Sri Lanka and Bangladesh garment industries, too, are in deep trouble. Fortunately the Indian textile industry will be able to tide over the problem of slowing global demand due to a huge domestic buying in the coming festive season,” Parikh says.

He, however, strikes a cautionary note on rising costs of energy and inputs. “Bangladesh textile industry enjoys the advantage of zero duty in the Europe and US market while Indian exporters have to pay up to 14% duty. The government of India needs to raise this issue with these nations,” he added.

Also Read | High raw cotton, yarn prices push Gujarat textile industry into turmoil

Chintan Thaker, chairman, Assocham Gujarat, and also group head, Corporate Affairs, Welspun group, also feels the upcoming festive season would definitely help Indian textile industry to overcome the challenge of muted global demand by the end of the third quarter of current financial year. “As far as intermediate and low-cost textile products are concerned, there would be a huge domestic demand. However, high-end textile product makers will have to wait for improvement in global demand,” he says.

Thaker, however, also urges the government to “stand by the side of exporters in this unprecedented phase when, for the first time in the history of the textile industry, we are witnessing peak cotton, power and container prices simultaneously. All these factors are directly connected with the exports of high-end textile products ranging from fabrics, garments, bedsheets and towels. Hopefully, things will start improving once fresh arrival of cotton starts in October and prices of the important input for textile industry would become affordable.”

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Most Read In Industry