Mixed Performance of T&A Sector in October 2023

24 November 2023, Mumbai

Industry experts and financial data align with CITI's October 2023 analysis of India's textile and apparel (T&A) sector performance.

Textile Exports Flourish but Apparel Sector Struggles

• Textile exports experienced a remarkable 24% surge in October 2023 compared to the same month in 2022.

• Cumulative T&A exports grew by 10.44% in October 2023 compared to the previous year, indicating overall growth in the sector.

• However, the apparel sector presents a contrasting picture, with an 8.08% decrease in exports observed in October 2023, highlighting the sector's struggles.

Mixed Picture Emerges from Overall T&A Export Performance

• The overall performance of cumulative T&A exports over the six-month period from April to October 2023 has been lackluster.

• A 6.67% decline was registered compared to the same period in 2022, and a more significant drop of 15.55% compared to the same period in 2021, reflecting a slowdown in T&A export growth.

  Video Insights

T&A Sector Makes Modest Contribution to Total Exports

• Despite the overall downturn, the T&A sector's contribution to the nation's total exports showed a modest improvement from 7.31% in 2022 to 7.6% in 2023, indicating a slight gain in its share of total exports.

Certain Segments Face Setbacks

• Popular Indian raw cotton and waste exports faced severe setbacks, declining by 78.69% compared to the same period in 2022, highlighting the challenges faced by specific segments within the T&A sector.

Manufacturing Sector Mirrors Subdued Export Performance

• The manufacturing sector mirrored the subdued state of exports, despite expectations of a boost from the domestic apparel market during the festive season.

• This subdued performance suggests that the manufacturing sector is also facing challenges apart from the slowdown in exports.

Manufacturers Grapple with Regulatory Challenges

• Challenges such as the recent Quality Control Order mandating Bureau of Indian Standards certification for man-made fibers, including imports, have contributed to a decline in exports.

• These regulatory hurdles have made it difficult for manufacturers to meet government specifications in international markets, further hindering export growth.

Workforce Implications: a Cause for Concern

• The implications of the sector's subdued performance on the workforce are a matter of concern.

• Industry leaders hold varying perspectives on the future trajectory of the T&A sector.

• While some, like KM Subramaniam, president of the Tiruppur Exporters Association, express confidence in a temporary decline and anticipate a revival with recent policy changes, others warn of potential job losses if the current trend persists.

Revival of Western Demand: Crucial for Apparel Exports

• The revival of demand in Western markets is identified as a crucial factor that could potentially uplift India's apparel exports.

• An increase in demand from Western markets could provide the necessary boost to the apparel sector, which has been struggling in recent months.

A Mixed Performance with Uncertain Future

• The CITI monthly report depicts a mixed performance in the T&A sector, with varying perspectives on the industry's future trajectory.

• The positive growth in textile exports and the modest improvement in the T&A sector's contribution to total exports offer some hope for the industry's overall performance.

• However, the challenges faced by the apparel sector, the subdued manufacturing sector, and the regulatory hurdles faced by manufacturers create uncertainty about the industry's future growth prospects.

  Key Insights:

  1. Textile Exports Soar:

     • Remarkable 24% surge in October 2023.
     • Mirrors positive financial data trends.

  2. Apparel Sector Struggles:

     • Apparel sector faces an 8.08% decrease.
     • Highlights challenges within the industry.

  3. Mixed Picture in Overall T&A:

     • Cumulative T&A exports show lackluster growth.
     • 6.67% decline compared to 2022.
     • 15.55% drop compared to 2021.

  4. Modest T&A Contribution to Exports:

     • T&A sector contributes 7.6% in 2023.
     • Slight gain from 7.31% in 2022.

  5. Challenges and Setbacks:

     • Certain segments, like raw cotton, face setbacks.
     • Manufacturing mirrors subdued export performance.
     • Regulatory hurdles impact export growth.

  6. Workforce Concerns Amid Uncertainty:

     • Workforce implications raise concerns.
     • Varying perspectives on sector's future.
     • Policy changes may impact revival.

  7. Crucial Role of Western Demand:

     • Western market demand crucial for revival.
     • Potential uplift for struggling apparel sector.

  8. Mixed Performance with Uncertain Future:

     • CITI report indicates a mixed performance.
     • Positive textile growth contrasts sector challenges.
     • Uncertainty persists about future growth.

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