How coronavirus affected the Indian textiles and shrunk yarn exports
The US and the European Union, which together account for 64 per cent of India’s readymade garment (RMG) exports, are staring at a recession.
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Exports of textiles and cotton yarn, which were coming apart even before the pandemic struck because of competition from Vietnam, Chinese stock liquidation and lack of free trade pact support, have been further devastated.
Yarn exports in India have taken a hit in the last few months. (Photo: Reuters)
India’s yarn exports contracted 30 per cent in the quarter ended March as imports by China, which accounts for a third of India’s yarn exports, fell as garment units there shuttered. Imports by Bangladesh, which accounts for nearly a fifth of India’s yarn exports, also declined. “Overall, exports are estimated to have nosedived 80-90 per cent in April and won’t revive in a hurry. Consequently, we expect yarn exports to slide 35-40 per cent (year-on-year) this fiscal,” reads a research note from Crisil. Indian merchandise exports fell 13 per cent (in dollar terms) in the quarter ended March compared to a year ago, and a steep 60 per cent in April as the Covid-19 pandemic and shutdown of national borders slammed global trade.
The US and the European Union, which together account for 64 per cent of India’s readymade garment (RMG) exports, are staring at a recession. The US is the worst-infected country now, and the pandemic-driven lockdown has ripped many apparel retailers there. Besides, a spike in unemployment and fall in personal incomes would cut spending on apparel. In the March quarter, India’s garment exports slipped around 16 per cent and in April, the fall was a drastic 91 per cent. Readymade garments exports may dive 30- 35 per cent this fiscal, Crisil said.
(Courtesy of Mail Today)