Several textile exporting countries including India are getting fewer orders from foreign buyers as retail sales have taken a hit in many developed markets due to high inflation and economic slowdown due to the Russia-Ukraine war.
“India’s garment and textiles manufacturing is decreasing gradually as domestic and export markets are underperforming. Spinning and weaving industries across the country are facing weaker demand so they are forced to cut down production substantially. Export-oriented garment manufacturing units are closing because they are unable to get export orders,” industry sources told Fibre2Fashion.
Garments and home furnishing segments, the last link of the entire value chain, are under immense pressure as they are not only lacking new export orders, but also facing higher cost of production due to expensive cotton. The natural fibre’s price did not decrease even during peak arrival season.
The central government is planning to bring PLI-2 early next year, according to industry sources. The scheme will encourage garment, made-up, and home textile manufacturers to bring new investments. There might be lower investment thresholds between ₹15 crore and ₹45 crore as the size of manufacturing units is smaller compared to upstream weaving and spinning sectors. Lower threshold limits will open the door for smaller manufacturers. It will be contrary to PLI-1 when the minimum investment requirement was ₹100-300 crore for two different categories.
Now the bigger question is the timing of PLI-2. The scheme is expected to be launched early next year when the market conditions are not likely to improve. Manufacturers in the targeted industries are currently unable to even utilise their existing capacity, so brining new capacities will be an additional challenge.
ALCHEMPro News Desk (KUL)
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