As global commodity prices are affecting manufacturing sectors in different manner, analysis by India Ratings and Research (Ind-Ra) shows that apparel and leather fall in the category of sectors in India that are witnessing low inflation and a low output recovery compared to the pre COVID level. The textile sector has seen a medium level of output recovery and low inflation.
Ind-Ra believes that the low recovery of output in labour-intensive sectors like apparel, leather and related products and textiles means a significant setback to employment.As global commodity prices affect manufacturing sectors in various ways, analysis by India Ratings and Research shows that apparel and leather fall in the category of sectors in India that are witnessing low inflation and a low output recovery compared to the pre COVID level. The textile sector has seen a medium level of output recovery and low inflation.#
Since fuel prices is a cost to almost all manufacturing sectors either directly or indirectly, a higher fuel inflation raises the input costs across all sectors, the rating agency said in a press release.
In addition to the fuel cost, the basic cost of the raw material, intermediate goods and wage costs push the prices, and in turn inflation, of the manufactured products.
Since this is happening against the backdrop of already reduced labour participation and low female labour participation in the work force, it could pose a serious policy challenge besides impacting the demand for items of mass consumption, Ind-Ra added.
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