Impact of COVID-19 on Indian Textile Industry

This post is contributed by Snehal Gehi.

The on-set of COVID-19 has had a severe impact on the global as well as the Indian Textile Industry. Various sectors including industrial, medical, educational witnessed a major setback during this pandemic. However, from the economic point of view, the Indian textile industry is a major concern currently. It’s not surprising that the textile industry was affected in terms of productivity, functioning, and employee relations. The entire workforce involved in the supply chain directly or indirectly is affected. Globally, the exports and imports have been resumed. The government has come up with various schemes and policies to help all the industries rise again.

Contribution of Indian Textile Industry in Indian Economy

The textile and apparel industry has been severely hit by the unholy duo of lockdown and pandemic. It is one of the important sectors in the terms of contribution of GDP, export, employment, and industrial output.

According to the data of Annual Report 2018-19, provided by the Ministry of Textiles, the sector contributes 13% to India’s total exports and happens to be one of the largest exporters. For the fiscal period of 2018-19 India’s total exports valued USD 37.5 billion (INR 2596 billion) and were growing at a CAGR (Compound Annual Growth Rate) of 7% since 2004-05. The textile industry in India is projected to grow approx. CAGR 10-12%, to reach USD 220 Billion in 2025-26. The sector contributes 2.3% to the GDP of the country. India ranked 2nd in textile export (6% global share) and 5th in apparel export (4% global share). After agriculture, the textile industry is the second-largest employment sector for over 100 million workers directly or indirectly.

Impact of Covid-19 on the Textile Industry

The widespread impact of Covid-19 changed all the numbers and the industry has shrunk drastically. There was a huge downfall in the domestic market with instant cancellations and lack of orders. The consumer demands decreased which resulted in no money circulation in the market. The workforce was hit the most leaving millions of skilled and unskilled labors with no other option other than to migrate to their natives. With heavy liabilities and no income, small-scale industries suffered the most and some of them had to shut down permanently. The effects have been such that the growth projection of the textile and apparel industry is shrinking by 28-30% and according to CITI (Confederation of Textile Industries) the recovery of the domestic market is quite steep post-pandemic.

The global supply chain has found itself in trouble with the cancellation of orders, unpaid bills, no logistics and what not. Supply chain is the backbone of the Textile Industry, and a healthy and consolidated supply chain is what earns profits. The COVID-19 outbreak led to a stoppage in production all around the world. Major companies were canceling or postponing their orders which affected the small scale industries involved in the supply chain. This situation had impacted the workforce as it is their only means to earn. Globally, changes were observed concerning maritime transport, for example, a reduction in the frequency of sailings and declining cargo demands.

The Covid-19 virus will end sooner or later. The post-pandemic world will altogether be different. Most industries will see a sharp rise in demand but it will not be so for the textile industries. The customer-product relationship at such a time will be more susceptible. The customers will be nervous to touch and feel the garments and try to stay away from the retail stores. The psychological damage resulting from the pandemic will make people less likely to spend as nobody will like to fill wardrobes just to feel better when they will not enjoy wearing them outside. We can see a shift from purchasing needs to basic commodities.

Amidst the pandemic, the textile industry was active with the production of medical and technical textiles. Considering the growing need of PPE kits, India became the 2nd largest manufacturer of PPE kits producing 4 lakh PPE kits and 1.5 crore masks every day. Well established large cap companies like Arvind, Vardhaman, Welspun, etc., launched their range of anti-viral fabrics which matched the American and European standards preventing virus penetration through the coveralls especially for frontline workers and doctors. It was a boost for the meditech industries with increasing demands in masks, gloves, healthcare upholstery, blood absorbing materials, bandaids, etc.

The COVID-19 crisis in a way turned into an opportunity for India in the apparel sector and India has rapidly emerged on the world map as a medical textile exporter and secured second position in the world to manufacture medical textiles. Multinational companies want to come out of China to India. Because of this, India can fulfill the market demands of Europe, Australia and America, which will open new dimensions for India and the country will get multi-million-dollar business.

We could see a lot of use of modern technology amidst the pandemic. The pandemic had put us in such a predicament that the textile industry couldn't organise physical fashion shows, trade fairs, exhibitions, etc.

For the first time ever, India conducted all these events online. The FDCI (Fashion Design Council of India) conducted digital fashion week where various designers displayed their work with around lakhs of viewers on various platforms.

To provide a solution to such situation, Bal Krishna Media Events Hospitality had organized a Virtual Exhibition, especially for the textile industry. The 3D immersive environment gave the feel of actually attending a real exhibition. The exhibitors could display their 3D machine models, interact with customers via text chat or with one-to-one video calls in any time zone. The visitors on the other hand can be part of the trade fair without having to book flight tickets, visa, hotels and local transportation which saved up a lot of money. As no logistics are involved there is a huge cost saving in participation in such virtual events.

To withstand in COVID 19 pandemic, the Government of India announced Aatma Nirbhar Bharat Abhiyaan for boosting economy of the country and making India self-reliant. Taking a step towards realizing “Aatma Nirbhar Bharat”, Handloom Export Promotion Council has endeavored to virtually connect the Handloom Weavers and exporters from different corners of the country with the International Market. With more than 200 participants from different regions of the country showcasing their products with unique designs and skills, THE INDIAN TEXTILE SOURCING FAIR was organized on 7th, 10th and 11th August 2020.

The e-commerce websites witnessed a boom in their sales as people didn’t prefer physical shopping. Online apparel shopping offers the convenience of shopping from the comfort of one’s home, a large selection of items to choose from, and access to the very latest products. However, online shopping does not enable physical try-on, thereby limiting customer understanding of how a garment will actually look on them. This encouraged the development of virtual fitting rooms, where images of a customer wearing selected garments are generated synthetically to help compare and choose the most desired look.

Conclusion:

The government has announced various schemes to boost the economy and help small-scale businesses grow. The government has allowed 100% FDI by automatic route in the textile sector and it is supposed to attract USD 140 billion foreign investments in coming years. Government is encouraging to setup SITP (Scheme for Integrated Textile Parks) and TUFS (Technology Upgradation Fund Scheme). The textile industry is prepared for the new normal. As a citizen of India, we should contribute in money circulation and help the textile market rise. The textile industry should also be prepared for any such situation which can arise in the future. India is blessed with a hardworking and exceptional workforce and soon the Textile Industry will be witnessing its golden days.

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About the Author:
Snehal is an undergraduate student pursuing B.F.Tech at NIFT, Kannur. She is a passionate learner with a creative mind and has an affinity towards modern technology in textiles, sustainable fashion, and clothing. She wants to acquire knowledge in the fields of technical textiles and the apparel supply chain.


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