Demand for textile products is expected to improve from the end of this month, according to Prabhu Dhamodharan, convenor of Indian Texpreneurs Federation.
According to a press release, the textile and apparel sector is facing uncertainty and challenges in demand and operational profitability for the last three months. Capacity utilisation has dropped across the textile value chain, especially for yarn and fabric, since May.
“We believe that the current trend is transitory in nature and the vibrant domestic consumption will support demand in the coming months along with revival of volumes in exports,” he said.
At present, Indian retail inventories are low. With festival season approaching, domestic demand for yarn and fabric is expected to increase. Further, with fall in price of raw materials, the entire manufacturing value chain has exhausted its stocks. This low supply trend will create a demand in the upcoming cycle. There are strong signals that buying will revive. Even after accounting for the inflationary trend, fashion domestic consumption will grow nominally due to expansion of GDP and opening up of the economy. “We believe that the current size of $ 85 billion will expand at least by 5 % to 7% in this year,” he said.
On the international front, the US trade data for May indicates strong import trend. The US imported ₹ 66,000 crore worth of apparels in May, which is higher 5 % compared to the previous three months average. Reduction in freight and raw material cost will also help boost overseas demand for textiles, he said.
Medium term outlook is good for textile exports mainly due to the continuous challenges emerging in China, one of the major producing countries. Buyers are steadily expanding their sourcing base to India, he added.
