On August 17, the Indian Textile Industry Federation, South India Textile Mills Association, North India Textile Mills Association and Indian Textile Export Promotion Council held a meeting to discuss the current difficulties faced by the Indian cotton textile industry. It is understood that Indian textile companies have been forced to reduce production due to rising costs and weak demand.
At the meeting, the above-mentioned Indian industry organizations decided to designate an organization to study the current situation and write a memorandum of understanding to submit to the government. It is understood that most factories in India have reduced their output by 15-20%, or are preparing to do so. The person in charge of a textile company said that starting from this month, the factory will stop working one day a week. The current crisis has forced the factory to reduce production capacity, which has never happened in 40 years. Large factories are closed for one day a week and small factories are closed for two days a week. This is also the case in northern India.
In addition, governments across India have introduced stimulus policies in recent years, and the substantial expansion of domestic textile production capacity has also caused trouble for the textile industry. Textile companies have been hit hard by capacity expansion and a sharp drop in export demand. According to D.K. Nair, general secretary of the Indian Textile Industry Federation, India’s cotton textile exports have plummeted from a peak of 140 million kilograms per month last year to 100 million kilograms in the second quarter of this year. The sharp decline in export demand in such a short period of time caught the Indian textile industry off guard. The sharp depreciation of the RMB will lead to an increase in the price of Indian cotton yarn in the international market, thereby further setting back India’s textile exports.
According to the Indian Textile Export Promotion Association, Chinese buyers are now delaying the issuance of certificates, and Indian textile mills are increasingly strapped for funds and have no choice but to suspend production. Most of the 500 small textile mills in Tamil Nadu have stopped production for one to two days a week. Since there is no cotton excise tax in India, pure cotton yarn manufacturers only suspend production one day a week.
The South India Textile Mills Association stated that the number of Indian textile workers is huge. If production is restricted and suspended for a long time, it will lead to a large loss of employees and an unstable labor force. The current situation in India is very worrying, and the government should provide immediate support to ensure the livelihood of the textile industry. In addition, the government should also provide interest subsidies and try to promote textile exports. The government’s delay in project reimbursement of the Textile Technology Upgrading Fund has had an adverse impact on the textile industry.
