Fashion Post Pandemic, Among several sectors that felt the backlash of COVID-19 pandemic, the fashion and textile industry have faced the heat of less exports, zero footfall, and scarcity of cash flow. Indian exports of textiles from April 2019 to January 2020 were worth $28.36.
Fashion Post Pandemic, Majority of the domestic producers are facing massive cancellations of orders from Europe and the United States. This coupled up with factory shutdowns, delayed delivery of summer garments and shortage of raw materials have caused the severe financial crises in the industry, from retail sellers to designer stores.
Fashion Post Pandemic, The average export amount of India in the first quarter stands at an average of $8 billion to $10 billion. Thus the industry is expecting an equal amount of revenue loss due to the extension of COVID-19 lockdown till May 3. A prolonged suspension of production and zero domestic demand are anticipated to cause further setbacks.
Resumption of the normal industrial function will take at least a month after May 3 to get back to normal whilst exports depend on containment of the COVID-19 pandemic in the key textile markets for India, mainly Europe and the US. Also demands from importing countries have flattened due to competition from neighboring producers of Pakistan, Bangladesh, and Vietnam.
Fashion Post Pandemic, Companies with limited scales and weaker balance sheets are supposed to be the worst affected if recovery from the economic backlash stretches beyond one quarter.
Fashion Post Pandemic, Fashion designers in India usually start working on their summer fashion collections in late February or early March. Productions of certain collections and quantity for the summers had already started and have come to a halt now. “We definitely have to reduce the quantity of merchandise that we are taking in. This is to ensure basically nothing goes into our storeroom, everything is on the rack so that it also helps the designer when the lockdown opens; they will not have to go full scale, they can work with smaller units,” stated Aparna Badlani of Atosa Mumbai.
Fashion Post Pandemic, She also expressed her concern about the post-lockdown situation and said that they’re unsure of whether people will panic buy or won’t turn up at designer stores at all due to the scare.
MEDIUM AND SMALL SCALE BUSINESSES
The textile industry consists mostly of medium and small scale enterprises (MSME) in contrast to large scale producers across the value chain. The MSME is highly vulnerable to business risks as its operations are mostly dependent on orders from large scale companies, working capital and exports.
On April 17, the RBI has announced a TLTRO of 50,000 INR for small scale businesses in the domestic market-facing liquidity crunch.