The $140 billion domestic textiles & apparel industry is passing through a challenging period and experts are of the view that the situation is unlikely to improve soon. They feel that it may take at least two-three quarters before things start looking up again. The two major markets – the US and EU – accounting for over 60 per cent of the Indian textiles and apparel demand, have remained sluggish for the last over six months, due to headwinds arising out of surge of inflation and uncertain geopolitical scenario. Consumers in these two and other markets have cut down spending on clothing, as they have to spend more on other household expenses. “After 18 months of robust growth through mid-2022, global retail sales of clothing have been dragged down by high inflation and depressed consumer sentiment, and prospects for 2023 look gloomy,” says a McKinsey report. During April-October 2022, textile exports registered a y-o-y decline of 20.78 per cent to about $11.3 billion. However, apparel exports witnessed a growth of 6.67 per cent to reach $9.1 billion during the same period. Cumulative exports of textiles and apparel during the first seven months of the current fiscal (April-March) were down 10.49 per cent to $20.5 billion. Share of textiles and apparel in the country’s total merchandise exports declined to 7.68 per cent in October 2022, as compared to 9.72 per cent in October 2021. This slowdown has happened at a time when, in 2021-22, the textiles & garment exports (including handicrafts) clocked an all-time high of $44.4 billion after two consecutive years of decline. Exports stood at $30 billion in 20-2021 and $34 billion in 2021-22. While the exports have slowed down, the demand in the domestic market has also not kept pace as expected. Despite strong growth in the overall economy, domestic sales are sluggish because of high costs and cheap imported garments. Sales in the domestic market, which usually pick up during the festival and marriage season starting October, were weak in 2022. The recent fears of Covid resurgence is further weakening the overall sentiment. “The situation is challenging and expected to be unchanged for a few more months now,” says Sanjay Jain, managing director, TT Ltd & past chairman, Confederation of Indian Textile Industry. “Both global and domestic markets are sluggish due to multiple factors. Global inflation is weighing heavily on the textiles and apparel sales, leading to slowdown in demand. Additionally, manufactures and exporters are faced with higher interest rates and surge in input costs. All these factors have tuned the overall condition very demanding”. The ongoing slowdown is taking its toll on manufacturing, with most of the textiles hubs, as also individual manufacturers, going slow. In fact, many of these units have cut down their production and are running at 40-50 per cent capacity utilisation, with less number of shifts, in response to large foreign buyers placing smaller orders. Surging inflationary pressure on input cost and higher interest rates have further added to the woes on the production side. Besides, local raw cotton prices are 10 per cent more expensive than global benchmarks. The cotton textile industry is demanding scraping of the 11 per cent import duty on cotton so that local textile mills can have a level playing field. Experts believe that, if the situation further worsens or prolongs for a longer period than expected, the industry may force to cut down on their workforce. It may be noted that the T&A industry plays a key role in the overall economic growth, as it is also the second most employment generating sector, after agriculture. Data suggests that the industry employs about 45 million people directly and another 60 million through allied sectors. Of all, women make up the largest workforce, accounting for 60-70 per cent of the total manpower. The industry holds a 4 per cent share of the global trade, accounting for 5 per cent of GDP and 13 per cent of the country’s export earnings.