Since the second half of 2022, the international textile industry has been in an unprecedented long-term downturn. Despite the initial surge in demand after the blockade of COVID-19, the global textile industry is now facing major challenges. In a recent press release, Dr. K.V. Srinivasan, the newly elected president of the International Textile Manufacturers' Federation (ITMF), emphasized many factors that led to this economic downturn.
1. Weak demand, inflation and geopolitical tensions have caused losses.
According to the global textile industry survey conducted by ITMF in November 2023, weak demand, inflation, geopolitical tensions, fluctuation of raw material prices, rising energy costs, labor shortage and rising interest rates all explain the main reasons for the decline of the industry. It is worth noting that 76% of the respondents pointed out that weak demand is the culprit.
2. Contract cancellation and prospect
About 44% of the survey participants reported that orders were cancelled in the past four months, and 5% of the orders were cancelled by more than 30%. Looking ahead, 44% people expect the business situation in the next six months to be more favorable, reflecting that cautious optimism exceeds the optimism in September.
Dr. Srinivasan emphasized the negative impact on India's textile and clothing industry, and attributed it to the challenges of raw material supply, high electricity costs and policy defects. ITMF urged urgent corrective measures, including abolishing the 11% cotton import tariff, solving the quality control order (QCO) problem and solving the pricing problems related to key materials.
In a speech to the Indian government, Dr. Srinivasan urged that short-sighted policies affecting raw materials, electricity, labor and new investment should be stopped until the industry recovered. It is suggested to take financial relief measures, such as suspending loans for one year, converting short-term loans into long-term options and increasing working capital, so as to prevent textile units from becoming non-performing assets and ensure employment.
3. Competitiveness and global strategy
Although India is the second largest manufacturer of raw materials in the world, India's textile exports are still stagnant at $35 billion. Dr. Srinivasan suggested a comprehensive approach and emphasized the need to take appropriate policy measures to improve global competitiveness.
Article sourse: https://www.cncotton.com/