Rising import from Bangladesh, financial crisis at NBFC hit textile sector

The industry says sales in the domestic market have slumped by 20-25 per cent in recent weeks

The financial crisis at non-banking financial companies (NBFCs) has hit India’s textile industry, as unavailability of working capital has restricted companies from capacity expansion and made difficult the servicing of existing loans.

Largely comprising micro, small and medium enterprises (MSMEs), the industry largely used NBFCs for working capital —commercial banks were slow in extending credit. 

Hence, “textile players, big or small, are facing a credit squeeze, with sluggishness in sales”, said Premal Udani, managing director at Kaytee India, a city-based children's garment maker and exporter.

“There is a sluggishness in apparel sales, set to continue for at least the next