India's apparel industry expects robust external demand to drive growth

With the second wave of the pandemic causing temporary disruption in manufacturing, India’s apparel industry expects robust external demand to drive growth in the sector.
 
According to top players in the industry, a resurgence in apparel spending in the western markets has led to the recent growth in textiles and apparel exports from India. Besides, there has been a shift in demand in the US, the UK as well as European nations towards Indian cotton garments owing to a ban on cotton produced in China. While the domestic market is largely stagnant due to localised lockdowns during April-May, share of exports has grown to almost 90 per cent of Arvind’s sales, Punit Lalbhai, executive director of the company, told Business Standard.
 
“While garments have always been largely exported by us, we are predominantly a fabric player wherein our fabric is converted into garments. Generally, we see 60 per cent exports and 40 per cent domestic sales in fabric but currently exports have been so strong that they are almost 90 per cent of our fabric sales,” said Lalbhai.
 
According to him, there is a pent-up demand for textiles and apparel, which was tepid a year ago owing to Covid-induced lockdowns. “Global brands were careful while buying during the pandemic and their pipelines are empty. They now need to fill them as markets have opened up in the US, the UK and Europe. The US opened but a lot of restrictions were in place which are now going away. The online business growth is also resulting in additional volumes,” Lalbhai added. Outbound shipments have been on the rise for apparels over the last few months. Exporters said that the order book is encouraging. “Exports are doing better and progress is good as compared to last year. The second wave has affected dispatch and production to a certain extent but we are slowly coming out of it, with states beginning the unlock process,” said A Sakthivel, chairman of Apparel Export Promotion Council (AEPC).
 
“There is a ban on cotton produced in China resulting in more orders for cotton garments. This is one of the reasons for the higher demand. Demand for medical textiles such as PPE suits and masks since August (2020) has been on a rise. The world is looking for sustainable textiles, and we are good at producing that,” Sakthivel said.

 
Western buyers are also shifting to India for cotton and this has led to hikes in cotton and cotton yarn prices in recent times.
 
Similarly, home textiles and made-ups are also witnessing a spurt in demand and sales. According to a Welspun spokesperson, the US government's office of textiles and appar­el (OTEXA) data in the last three years shows that India’s market share in towels and bedsheets increased by four per cent and reached 42 per cent and 53 per cent, respectively.
 
“We have seen a massive shift towards e-commerce. With digitisation accelerating in the US markets, we hope to see an upside happening which will be contributed by our brands like Christy, Martha Stewart, Scott Living, online and offline. And, also from our D2C brands like Welspun and Welhome. We definitely see huge potential there and robust growth, moving forward. Recent US economic indicators show that the economy is on a firm footing and is expected to grow the fastest in three decades," the Welspun spokesperson stated.
 
According to Welspun, vaccination, economic stimulus, payments, and tax refunds are providing a substantial increase in personal income and thus purchasing power in the US. The challenge has been in making most of the growing exports from India, especially in garments, due to the localised lockdown. Extended lockdowns in states such as Karnataka, which house several garmenting units, including those of Arvind, have hit manufacturing.