How Is Looming Global Recessionary Fears Impacting Indian Textile
17 August 2022, Mumbai:
Textile Industry Outlook
Imported inflation pressure remains the overarching risk. According to Upendra Prasad Singh, the textiles secretary, Indian textile makers are beginning to see a slowdown in demand due to rising energy and food costs that have reduced demand for goods like curtains and bedspreads in the US and Europe's key export markets. Inventory levels are pretty high at the time.
According to Textile Secretary U.P. Singh, the Ministry of Textile demand has decreased due to the US's high inflation rate, particularly for home textile items since they are more price-sensitive than clothing and apparel.
Is the global economy headed for recession
According to the most recent data on industrial and services activity, the US and European economies are facing bleaker prospects. Recession risk is being exacerbated by high energy prices as a result of the conflict in Ukraine, supply chain delays as a result of pandemic-related lockdowns in China, soaring commodity prices, and rising interest rates.
India's exports have also declined sequentially after reaching an all-time high in FY22. The nation's trade imbalance came to a record in June due to a substantial increase in imports of gold and oil.
"While demand isn't as strong as it was a year ago, there are still chances. The China plus one approach is being used by other nations. Sri Lanka is likewise clearing out space in the industry. He boosted export development through free-trade agreements with Australia and the United Arab Emirates.
Global recession fears loom large
In addition to outsourcing labor and production, the US imports raw resources from foreign nations. Consumers are starting to reduce their spending due to the stress the US is experiencing and the potential for an impending recession.
Consumers' worries are being stoked by recent reports on bankruptcy rates and a decline in employment growth. The fashion sector is probably going to feel the effects of this. The taste of consumers may shift in the following months from luxury items to necessities. They'll be inclined to seek ways to save money.
Sakthivel, President of the Tirupur Exporters Association, said, "There would undoubtedly be some impact on textile shipments to the US." Items with lower value and a price tag of $3 to $7 per piece will be less impacted. On the other hand, there is a positive rise in domestic demand. The market seems promising and is expanding steadily.
How to prepare for global economic collapse
To balance their profits, Indian clothing producers are increasingly concentrating on the request of wealthy consumers in the home market.
According to Virendra Sharma, the president of Oswal Wool Mills in Ludhiana, which owns the Monte Carlo brand, As much since 85% to 90% of our output is for the domestic market as the demand has been fantastic in the nation these previous two quarters, according to the news.
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