Pune: About a third of textile and apparel exporters in India have reported a nearly 50% drop in turnover over the last three months compared with the April to June period, according to a survey by the Confederation of Indian Textile Industry (CITI). The survey indicates that the increase in US tariffs has been a significant factor contributing to this decline.
The perception survey covered eighty big exporters and some industry associations. The US is their largest market, accounting for about 28% of the country's total textile and apparel exports.
"The major factors contributing to this decline included requests for discounts by US buyers, cancellation or postponement of orders and reduction in order volumes," CITI said in a statement.
About 85% of the respondents reported an inventory buildup due to the reduction in orders, while nearly two-thirds of the respondents said they have to offer discounts to the tune of 25% to remain competitive, the survey highlighted.
"More than 80% of respondents reported experiencing an extended credit cycle across the supply chain as a result of the recent impact," said CITI. "Among them, over half indicated that the credit period has increased by three to six months, reflecting a substantial strain on liquidity. Additionally, around 40% of respondents reported a rise in working capital requirements by more than 30%, further highlighting the growing financial stress within the sector."
The industry has sought relief measures. CITI said that more than one half of the respondents have urged the government to announce a moratorium on loan repayment, while 42% have recommended the introduction of collateral-free loans to help address the surge in working capital requirements.
The textile industry has also asked for enhancing the raw material competitiveness by removing import barriers such as quality control orders, import duties, and related restrictions.
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The perception survey covered eighty big exporters and some industry associations. The US is their largest market, accounting for about 28% of the country's total textile and apparel exports.
"The major factors contributing to this decline included requests for discounts by US buyers, cancellation or postponement of orders and reduction in order volumes," CITI said in a statement.
About 85% of the respondents reported an inventory buildup due to the reduction in orders, while nearly two-thirds of the respondents said they have to offer discounts to the tune of 25% to remain competitive, the survey highlighted.
"More than 80% of respondents reported experiencing an extended credit cycle across the supply chain as a result of the recent impact," said CITI. "Among them, over half indicated that the credit period has increased by three to six months, reflecting a substantial strain on liquidity. Additionally, around 40% of respondents reported a rise in working capital requirements by more than 30%, further highlighting the growing financial stress within the sector."
The industry has sought relief measures. CITI said that more than one half of the respondents have urged the government to announce a moratorium on loan repayment, while 42% have recommended the introduction of collateral-free loans to help address the surge in working capital requirements.
The textile industry has also asked for enhancing the raw material competitiveness by removing import barriers such as quality control orders, import duties, and related restrictions.
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