According to a recent webinar by CARE Ratings, Indian textile and apparel industry reported significant reduction in sales starting from March when the government imposed coronavirus lockdown. Post lockdown domestic retail sales came to a grinding halt. To add to the woes of regular garment manufacturers, international customers, who were also under lockdown, deferred orders from Indian suppliers.
Sudeep Sanwal, Senior Manager, CARE Ratings said that GDP of two major export destinations for Indian apparels manufacturers, ie, the United States and Europe, is expected to contract in 2020 which will further lower the demand for apparels. These two destinations combined account for more than half of the apparel exports from India. Due to lockdowns, order cancellations took place in massive numbers which also led to pent-up inventories. Since, the fashion industry is highly dynamic in terms of styles, the unsold stock may soon go out of fashion which will lead to inventory losses for manufacturers.
The spring summer collection of most manufacturers also witnessed a significant hit. Also affecting the sales of the manufacturers was the fact that despite having ready clothing, logistics posed a problem.