In the wake of a global economic decline and low domestic demand, India’s garment manufacturing sector has faced a significant problem, undergoing a sharp decline of 22.6% between April and August 2023 compared to the same period in the previous year. These challenging circumstances have been increased by a simultaneous 2% drop in textile production during this period, as reported by the Confederation of Indian Textile Industry (CITI). Data from CITI’s Index of Industrial Production indicates a marginal improvement of 1.6% in textile production in August. However, this minor uptick does not reduce the overall decline observed in the cumulative index for April to August. The decline in the “wearing apparel” category, representing garments, was particularly notable, dropping by 17.1% in August and 22.6% in the April-August 2023 period compared to the corresponding period in the previous year.
Notably, there was a ray of hope in September 2023, with textile exports experiencing an 11.06% growth over the previous year. However, this positive development was dominated by a 11.23% decline in clothing exports during the same month. Several factors have contributed to this decline, as voiced by industry insiders. A stringent Quality Control Order mandated by the government, requiring Bureau of Indian Standards certification for man-made fibers, has delayed exports. This regulation has made it challenging for manufacturers to source the specified raw materials internationally, further impacting exports. Additionally, many garment exporters have reduced workers’ shifts and decreased overtime production to manage with the reduction. While this measure has minimized job losses, it has not prevented production losses. In response to the crisis, industry leaders have careful positive outlooks. KM Subramanian, President of Tirupur Exporters’ Association, noted that recent announcements regarding drawbacks in duty hikes could potentially encourage exports. However, he also highlighted the need for sustained recovery efforts to prevent significant job losses in the industry.
Rahul Mehta, Chief Mentor of the Clothing Manufacturers Association of India (CMAI), interpreted the domestic market’s inactivity since mid-March. Although he expects a boost in sales during the festival season, he expects growth to remain flat compared to the previous year. He pointed out the critical role of the post-Deepavali wedding season, suggesting that an uptick in sales during this period could provide a much-needed delay for the struggling industry. However, he also issued a warning: if the current trend of low production continues for another couple of months, limitless job losses could become unavoidable, further deepening the industry’s tragedy. India’s garment manufacturing sector finds itself at a crossroads, clashing with both domestic and global challenges. While there is little hope, sustained efforts and supportive policies are essential to navigate the industry toward recovery and prevent significant economic follow-up.
