Indian Textile Industry Challenged by Lockdown

The Indian textile industry in crisis

The Indian textile industry ranks among the world's leading producers and is one of the country's oldest economic sectors. India embarked on textile production in the 19th century during the American Civil War which had caused a cotton shortage in Europe. Today, the Indian textile industry is highly diversified and covers many segments: cotton, wool, silk, hand-woven materials, synthetic materials, garments, etc.

The importance of the textile industry

In 2019, textiles in India represented approximately 250 billion dollars and contributed to more than 2% of the Gross National Product and 15% of the country's exports between 2018 and 2019. It is the second largest employer after agriculture, on which it depends for the supply of raw materials, particularly cotton.

The impact of lockdown

Since March 25, 2020, India has been locked down to limit the spread of COVID-19 as have many other countries in the world. The textile industry, which employs nearly 60 million people, is particularly exposed as an estimated 50% of workers are paid daily. These people, who are actually the backbone of the industry, find themselves without income and have been forced to return to their villages because it's the only place where they can get family support.

Consequences on global demand

In Europe, we are witnessing a real crisis among retailers and brands and fashion manufacturers in India are suffering the consequences. The halt in global consumption of fashion items has a direct impact on Indian manufacturers. Before lockdown, some brands canceled or reduced future orders or even delayed payment. But even more concerning are the cancellations of orders already in production that are beginning to happen.

The cash flow problem for manufacturers

The purchasing conditions and relationships between brands and manufacturers are inequitable since it is the factories that advance funds for the purchase of raw materials and payment of labor. When an order in production is canceled, the manufacturer has usually already paid for the raw material and part of the work performed by its employees. Unfortunately, in India there are few government aids provided to factories (no zero-interest government-backed loans, no unemployment system, etc.) to reduce or cover the impact of such a cash situation. This puts thousands of jobs at risk in India.

Who is most affected?

The first people to suffer from this situation are workers who many will receive no salary in April and who risk losing their jobs when production resumes. Then factory owners who were already fragile before the crisis risk closing their doors. Artisans who symbolize the Indian textile industry by giving it an authentic and unique aspect in the fashion world, embroiderers, dyers, printers (block printing), weavers... will also suffer the impact of slowed activity. They are often self-employed entrepreneurs and unfortunately will receive no government assistance.

Possible solutions

Several solutions and opportunities could ease the impact of the COVID-19 crisis on the Indian textile industry: finance future production upstream to avoid financial pressure on manufacturers, integrate Indian techniques into upcoming collections to support artisans (Tie Dye, hand embroidery, screen printing or block print, use of hand-woven fabrics), and even delay sale seasons to limit order cancellations.

Towards more sustainable and fair fashion

In the long term, real reflection must be undertaken to change how the fashion industry works and make it more sustainable and fairer. Among the avenues: promote sustainable, natural and organic materials; minimize unnecessary processes; ask manufacturers for more transparency about their subcontractors and their compensation; minimize plastic use as much as possible; implement stricter quality controls; and promote more equitable and responsible manufacturing. Discover our visions on tomorrow's fashion.

Article published by lepetitjournal.com Bombay on April 29, 2020, updated December 19, 2023. Read original article