A Challenging Landscape for Indian Textile & Apparel Exports
24 May 2023, Mumbai
India's textile and apparel export sector has been grappling with a prolonged period of negative year-on-year growth, enduring a consistent decline of approximately 20%.
This downward trend has persisted for ten consecutive months, with April's data revealing a significant 21% year-on-year drop. The textile sector faced a decline of 19.2%, while apparel exports took an even greater hit with a decline of 23.2%.
Between January and April, India's cumulative textile and apparel export value reached $11.95 billion, reflecting a 20.1% year-on-year decrease.
A Shift in Export Destinations: Prioritizing the United States
In recent years, India's textile and apparel exports have experienced a shift in their primary focus, transitioning from the EU-27 to the United States, which now stands as the largest market for Indian exports. Bangladesh follows closely as the third significant market.
The UK and the UAE each account for approximately 6% of exports, while ASEAN and China represent relatively smaller markets. The export share to the United States decreased from nearly 28% in 2022 to 25.5% in Q1 2023, whereas exports to the EU-27 increased to 21% during the same period.
Year-on-Year Changes in Export Markets: Declines Across Major Players
Analyzing the year-on-year changes in India's textile and apparel export destinations reveals a widespread decline in most major markets during the first quarter of 2023, with the exception of China, which exhibited slight growth.
The most substantial decline was witnessed in exports to Bangladesh, plummeting by approximately 60%, followed by a decline of around 32% in exports to ASEAN. Even the United States, as the largest export market, suffered a year-on-year decline of 25%, while the decline in the EU-27 was slightly smaller.
Domestic Market Focus and Export Support: A Delicate Balance
India's textile and apparel industry primarily caters to the domestic market but heavily relies on export support. However, since the second half of the previous year, the sector has faced mounting pressure due to declining exports, and as of April 2023, there has been no significant turnaround observed.
The situation is expected to improve in the latter half of the year. Notably, the United States remains the largest market for India's textile and apparel exports, with the EU-27, Bangladesh, and the UAE also holding significant shares.
China and ASEAN, on the other hand, represent smaller markets. During the first quarter of 2023, nearly 70% of India's export destinations experienced significant year-on-year declines, further emphasizing the need for a proactive approach.
Reviving Growth
Battling Declining Growth; The persistent decline in India's textile and apparel exports raises serious concerns for the industry.
The shift in export destinations and the year-on-year decline across major markets underscore the urgent need for strategic measures to revive growth. Despite these challenges, there is hope for improvement in the latter half of the year.
Battling Declining Growth
Efforts must be made to strengthen export support and explore new market opportunities. Adapting to changing dynamics and proactively addressing challenges will be crucial for India's textile and apparel industry to regain its momentum and ensure long-term sustainability.
By seizing the potential of both domestic and international markets, India can position itself for a brighter future in the global textile and apparel landscape.
