Textiles face tariff turmoil amid US-China tensions and India's woes

Amid the 100 per cent tariff on China by the United States raising hopes for the Indian textile industry, a survey conducted by the Confederation of Indian Textile Industry (CITI) found that about one-third of the respondents reported that their turnover has been reduced by over 50 per cent due to the current tariffs on India. Bangladesh, Vietnam, and Indonesia have an advantage on the tariff front.  

 

Impact on turnover 

According to the respondents, buyers in US are asking for up to 30 per cent discounts, while 25 per cent of orders are getting cancelled or postponed, and the industry is witnessing a 20 per cent reduction in volumes too.

  Here are the results

 

36% Over 50 per cent impact on turnover

28% 25-50 per cent

28%10-25 per cent

8% Less than 10%

 

 

Discounts and credit cycle woes

 

Around two-third of the respondents have to offer a discount to their buyers. About 85 per cent of the respondents have reported an inventory buildup due to the reduction in orders

 

62% Offering discounts to the US buyers, while remaining 38 per cent are not

82% Experiencing extended credit cycle across supply chain. Among them, over half indicated that the credit period has increased by 3 to 6 months, reflecting a substantial strain on  liquidity

40% Respondents who reported a rise in working capital requirements by more than 30 per cent