Fibres and Yarns

Year end 2022 status check on global trends and India’s Textile/Clothing Industry

Published: April 12, 2023

While the first half of 2022 started with recovery and hope for the post-covid world trade, it was not yet over from the second-half.

The major and decisive global headwinds impacting the world situation are: 

  • Continuation of Russia-Ukraine war in 2023, and with its ongoing impact on the disruption of global commodity markets and out of range energy prices,
  • Continued disruption of and high sourcing cost for global supply chain,
  • Raving Inflation of more than 7 % in major world economies, including India, and,
  • The upcoming global threat of New Covid 4.0 virus creating havoc already in China, and economic possibility of world trade going into Deflation/depression, further in the event of growing lockouts in China and other countries. 

The major drivers above are the key global factors to be understood for ongoing reduced Retail and consumption driven demand which has reduced the consumption of textiles & clothing at the cost of increasing food & energy bills for the consumers worldwide.

The above factors of demand disruption have now taken hold of world economies from 2nd half of 2022 and may as well impact the entire new year-2023


The global economy drivers outlined above, have created the global recession situation and especially in terms of looming economic depression. It has seriously impacted the manufacturing, retail and export sectors of textile driven economies like India, China, Bangladesh and now Vietnam too.

The much-reduced new export ‘Order’ from MNC buyers has come to almost stand still and, already played havoc with the textile exporting companies of global T&C exporting leaders like India, Bangladesh and Vietnam.

In the view of the yet full warehouses on the importers side, there is minimal buying happening from large MNC buyers and, that too from `near to shore` producers and suppliers, ex.: Europe giving just in time orders to next door Turkey or Romania and, USA doing the same for Mexico and Central America.

This is clearly reflected in the diminished patterns as summarized below:

  • India’s overall merchandised goods export is hovering at avg. $29-30 Bn. per month, vis-a-vis earlier $40 Bn. P.m. levels.
  • Though India touched a record level of overall T&C exports of $44 Bn. for the year 2021-22; the estimate for the current ongoing year to be 30% less.
  • The mighty `Cotton` in Indian market has fallen flat on its face with a huge fall off 45% from its peak level in the last Year, and now standing at Rs 57,000/ Candy level for the std. S6 variety. However, for some reasons best known to the government the import duty on cotton is still at 11% and, which in fact requires it to be eliminated to Nil so as to help the cotton textile chain. This will also improve the manufacturing Viability of thousands of yarn spinning mills
  • The impact of the ongoing `demand recession’ and low textile demand overseas, is impacting the Yarn Spinning mills directly since the beginning of the 2nd half of 2022. Today majority of India’s spinning mills are working on reduced shifts/reduced no. of days and, possibly the average capacity utilization of 55-60%. No wonder that Cotton yarn prices have taken a hit of Rs 100/kg from their peak values ex., 30 Ne Comb. down to Rs 270-275 /Kg. Do recall that just a year back it was touching a level of Rs 390-405 kg for 30s combed.
  • The final hammer and the worst impact of such global macro changes, is always on the small to medium apparel and textile made up units that cater to the export clients and those who do not have running orders to sustain.
  • Slowing global growth and reduced consumption with cooling demand are likely to shrink India’s goods exports by more than 2% in 2022-23 and grow just 1.5% next year. CARE research report is also signaling a sharp drop in outbound shipments over the next quarter too. This will be far behind as compared to last year’s merchant goods export of $422 Bn. /year, for FY 2021-22.
  • The biggest fear is that if above listed global macro factors drive the world into  a `Depression` kind of situation as was scene globally over 2008-2009, then Textile and apparel sector will see closure of many small to medium manufacturing units and, millions of  job exits like the type already happened in the IT and E-commerce sector since July 2022.

India’s T&C exports have already witnessed a 70% decline in its cotton Yarn export during September ’22 as well on Y-o-Y basis. In October ’22, the shipment was a meager US $ 128.25 million, as compared to US $441.51 Mn in the same month of last year 2021, and far below past avg. of $350 Mn per month. Due to global headwinds, India’s textile/clothing exports may register 25-30% lower levels for FY 2023-24.


Global retail situations for the apparel sector, and falling consumption and demand form the USA and EU blocks is a matter of serious concern for India.

Deteriorating macroeconomic and geopolitical conditions have weighed heavily on the global textile & clothing retail industry in the second half of the year and continue to leave textile retail and fashion executives on edge as 2023 looms.

With inflation and economic headwinds incessantly threatening the markets and the Ukraine-Russia war in backdrop as well as the slow and disrupted recovery post-virus, the global fashion industry is headed towards a low demand/consumption future.

Rising inflation weighing on consumer confidence and in turn lowering spend for T&C goods is resulting in stockpiling in importers warehouses and brands are having to re-evaluate their order strategies with suppliers including `just in time` and low inventories.

In the above outlines and a dire global scenario, focus for India’s textile manufacturing and exports is advised as per the Road Map outlined below:

  • Alignment of MMF textile sector into the global export markets and,
  • Strong diversification into Technical Textiles, with serious players for PLI scheme, 
  • PLI 2.0 scheme to encourage and support MSME invest by MSME Companies and
  • Very quickly to forge meaningful and working FTAs with high demand/high consumption textile importing blocks like USA, EU and others.

India’s textile exports ranking is still not in the top 5 textile exporting countries list, despite being close no.1 as a Cotton producer. It is also now very clear that the world is going for cheaper MMF and blended textiles with increasing share of polyesters.

To perform, to earn in textile global baskets, India has to come out of the dummy Cotton advantage which has jinxed its export possibility and created a high cost for the apparel and home textiles value chain.

Another very serious area of concern for India’s textile export sector is the total lack of meaningful FTA/Trade pacts that can push out large volumes of T&C exports. These are needed with the world’s largest textile importing blocks like the USA and the EU; and do not really help with mini-importers like UAE or Australia. Unless real working FTA are put in place with world largest consuming blocks, i.e. USA and EU, India will keep losing its share to smaller yet preferred exporting countries like Bangladesh and Vietnam, which are already enjoying  duty-free access.

By: Munish Tyagi

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