World Textile Day on October 24: Effects of COVID-19 on Indian Textile industry

October 23, 2020 5:49 PM

Now as things are gradually opening, the industry is facing workforce crunch, broken supply chain, lack of funds and loss of confidence.

The Central government has announced many schemes to boost the economy, especially for small-scale sectors including textile industry.The Central government has announced many schemes to boost the economy, especially for small-scale sectors including textile industry.

By Durgesh Agarwal

A virus which started from Wuhan, China, took the world by surprise. It is being considered as the world’s worst experience in human history. Almost every nation has been affected and has faced partial or full lockdown. On 24th march, when lock down was announced in India, it left everybody shocked and surprised. Initially Citizens took it as responsibility in the first phase but as it was extended, people started facing heat from all sides- rents, medical expenses, school fees, general expenses continued but incoming funds suddenly stopped.

Demand for Textile goods and products was suddenly NIL domestically and internationally. COVID-19 has not spared any industry, so in the case of Textiles, it is no exception. Textile Industry in India is the second largest employer after agriculture, direct and indirect both, hence it is one of the worst hits. Textile sector is a major contributor in Export in India e.g. 11.4% in total export earnings in 2018-19, valuing USD 37.5 Billion. India had a global share of 6% in export before the pandemic.

Textile industry in India, once projected to grow approx. CAGR 10-12%, to reach USD 220 Billion in 2025-26 but now things are not certain as industry has shrunk approx. 30% domestically in the first quarter and impact on export is also very huge. The International Textile Manufacturers Federation (ITMF) has found in a survey that 8% avg. orders have dropped worldwide and are expected 10% down from 2019.

The workforce is the worst of all to be hit by pandemic. People were left high and dry and the future was uncertain. While many NGOs and individuals took responsibility for the migrant workers, not every worker could have been reached and hence most of them with unknown future were forced to leave for their native places.

Now as things are gradually opening, the industry is facing workforce crunch, broken supply chain, lack of funds and loss of confidence. Workers are returning to the cities as they could not find work opportunities back home. Employers are also extending a helping hand to them to boost their business.

In recent times, hygiene has become the most important factor. Textile industry will be benefited with this new opportunity. PPE kits, masks, disposable towels, disposable bed sheets etc. are new areas where Indian manufacturers can take the lead. There is a big export market for these products. India has become the second largest manufacturer for PPE kits with more than 600 certified companies for its manufacturing.

The Central government has announced many schemes to boost the economy, especially for small-scale sectors including textile industry. Government has allowed 100% FDI by automatic route in the textile sector, it is supposed to attract USD 140 Billion foreign investment in the coming years. Government is also moving with Integrated Textile Parks (SITP) and Technology Upgradation Fund (TUF). According to India Brand Equity Foundation, Twenty-one readymade garments manufacturing units in seven states were announced for modernization and boosting the economy of the textile sector.

As textile is a consumer driven industry, it largely depends on the overall health of the economy and we should be optimistic for growth of industry in coming years. Though growth will lag in the coming months, is still expected, since India has potential to reach USD 70 Billion approx. in export by 2024 and will have much more global share.

(The Author is Consultant to Textile Industries and experience of 33 years working with leading manufacturing polyester industries in India. Views expressed are personal.)

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