Consumers are reining in spending
Inflation at record levels happening countries after countries. The world’s major central banks are aggressively raising interest rates to control the situation. As a result, the cost of loans has increased from families to institutions. Consumers are reining in spending amid high cost of living conditions. All in all, there is a risk of recession in the world economy. In this situation, the textile and clothing industry of India is facing a crisis says Reuters.
Consumers in the US, Europe and other major markets have cut back on apparel purchases due to high inflation in the wake of the Russia-Ukraine war, industry officials said. India’s textile and apparel industry worth $20,000 crore is in dire straits. The purchase order of this industry is decreasing with time. This indicates that the downward trend of the sector will continue in the next year as well.
Textiles contribute about 22 percent of India’s total export earnings. The sector’s exports have been contracting for five consecutive months. Last November, the industry’s exports fell by more than 15 percent to $3.1 billion from a year ago. Despite strong growth in the economy, sales of domestic goods are slowing due to high prices and cheap imported clothing. The workers of the sector are at risk of losing their jobs. More than four and a half crore people are working in this industry in India
Local textile mills are now reducing production after strong sales earlier this year. In this, the country’s industrial production contracted by 4.3 percent in the third quarter of this year (July-September). This situation has worried the country’s policy makers. Already Prime Minister Narendra Modi is struggling to create employment for the millions of young people who enter the job market every year. Meanwhile, a slowdown in the textile industry could slow down the flow of new job creation.
Apparel Export Promotion Council Chairman Naren Goenka said, “We see a difficult situation for at least the next six months.” Because the purchase orders from major markets including the European Union and the United States have decreased significantly. Inflation and global constraints have also hurt domestic sales.