India is one of the few countries in the world with a relatively complete textile manufacturing industry chain. It is the world’s second largest producer of cotton and the second largest producer of chemical fiber. The output of cotton and chemical fiber accounted for 23% and 9% of the world, respectively. The spinning capacity accounted for about 22% of the world. India’s textile and apparel exports rank second and third in the world respectively. According to United Nations statistics, India’s exports of textiles and apparel to the world totaled USD 35.49 billion in 2019. The textile industry is an important civilian production and foreign exchange earning industry in India. It contributes approximately 7% of India’s industrial output value and 15% of its exports each year, and directly employs more than 45 million people.

After the outbreak of the coronavirus, India adopted blockade measures to prevent and control the pandemic. Production activities were stopped and ports were shut down, which had a strong impact on the textile industry chain. The start-up rate of textile enterprises decreased and the unemployment rate continued to rise. Since June began to unblock it in stages, the Indian economy once began to gradually recover, but the current spread of the pandemic has intensified. Affected by multiple factors such as employment and supply chain, many export companies cannot start production normally and guarantee on-time delivery, resulting in the loss of export orders.

 

According to data from the Ministry of Commerce and Industry of India, in April 2020, India’s textile and apparel exports shrank by 87.5% year-on-year. Since then, the decline in exports has narrowed month by month. In September, textile and apparel exports increased by 10% year-on-year. This is this fiscal year (from April 1, 2020-2021). The monthly export value has achieved positive growth for the first time, and the cumulative export value has not reversed the negative growth trend. From April to September 2020, India exported a total of USD 10.97 billion in textiles and apparel, a year-on-year decrease of 31.7%. In terms of product categories, apparel exports, which accounted for 43.6% of the total exports of the Indian textile industry, fell the most. From April to September, India’s global exports of apparel totaled USD 4.78 billion, a year-on-year decrease of 39.3%; the export of chemical fiber textiles (accounting for 13.2% of India’s total textile and apparel exports) was also more obvious, with a year-on-year decrease of 38.7% from April to September; Exports of cotton textiles (exports accounted for 36.6%) and carpets (exports accounted for 5.4%) fell relatively low, and the export value decreased by 19.5% and 14.4% year-on-year respectively. Affected by work stoppages, production cuts and declining exports, the Indian textile industry’s production has also fallen sharply. According to statistics from the Ministry of Statistics and Planning and Implementation of India, in April 2020, India’s textile and apparel production fell by 90.8% and 94.1%. As the severity of the pandemic has not been alleviated, the current production has not resumed growth and is slowing down again.

 

Affected by the pandemic, the outlook for the Indian textile industry is still not optimistic. At the beginning of the outbreak, the number of cases in India increased slowly, but the situation began to change in the second half of the year. In mid-September, India’s daily increase in the number of confirmed cases exceeded 70,000. The media reported that its textile factories had drastically reduced production capacity, making it difficult to stably accept orders from the international market. Statistics show that the United States and the European Union are the most important export markets for the Indian textile industry. In 2019, India’s textile and apparel exports to the United States and the European Union accounted for 23.8% and 19.3% of its total textile and apparel exports, respectively.

 

Since May, the economies of the United States and Europe have gradually reopened, and the consumption of textile and apparel products has begun to recover. Since the second half of the year, retail sales have recovered to about 85% of the same period in 2019. Due to the compression of brand inventories to a low level in the early stage, the arrival of peak consumption seasons such as Christmas and Black Friday prompted brands to place orders. The aggravation of the pandemic has caused India to fail to fully grasp the current round of orders, and the development pressure of the textile industry remains prominent. The rating agency ICRA said in mid-October that the sales revenue of Indian apparel exporters in the 2020-2021 fiscal year may fall by 20% to 25%, and the revenue of manufacturers focusing on the Indian domestic market is expected to fall by 30% to 40%.

 

Due to the remarkable results of domestic pandemic prevention and control, my country’s textile industry chain and supply chain have gradually resumed normal operation from mid-to-late April. After the reopening of the U.S. and European markets, the orders of Chinese export companies have rebounded, and the total export volume of the textile industry has also turned negative to positive in the second half of the year, and the growth has gradually accelerated. According to the investigation of the professional associations, as South Asian factories cannot guarantee on-time delivery, some textile companies in my country have indeed received orders transferred from brands from India, Bangladesh, Sri Lanka and other countries. Among them, orders for home textiles such as towels and bedding are relatively large. The COVID-19 pandemic will also have an important impact on the layout of the international textile supply chain. The trend of more vertical and decentralized industrial chain and supply chain distribution is expected to be unavoidable. The path of China’s textile industry to participate in the construction of international industrial division of labor and resource allocation system under the “dual circulation” pattern is bound to be further adjusted. In general, for orders transferred from South Asia, on the one hand, we must ensure product quality, provide good customer service, and maintain good reputation; on the other hand, we must also objectively understand that short-term order return does not represent long-term development trends. Promoting transformation and upgrading, continuously improving labor productivity, resource allocation efficiency, independent innovation capabilities, and steadily optimizing the division of labor status in the international industrial chain and supply chain are still the fundamental development direction of my country’s textile industry.