India’s yarn exports are estimated to have nosedived 80-90 per cent in April and are not expected to revive in a hurry. Yarn exports to major buyers like China and Bangladesh have declined due to the COVID-19 pandemic. Consequently, yarn exports are likely to slide 35-40 per cent yar-on-year during the ongoing fiscal 2020-21, according to CRISIL RESEARCH.
“Indian merchandise exports fell 13 per cent (in dollar terms) in the quarter ended March (on-year), and a steep 60 per cent in April as the COVID-19 pandemic and shutdown of national borders slammed global trade,” Crisil said in its latest ‘Covid Corollaries’.
Exports of textiles and cotton yarn, which were coming apart even before the pandemic struck because of competition from Vietnam, Chinese stock liquidation and lack of free trade pact support, have been shred, the report said.
In the quarter ended March 2020, India’s yarn exports contracted 30 per cent as imports by China, which accounts for a third of India’s yarn exports, fell as garment units there shuttered. Imports by Bangladesh, which accounts for nearly a fifth of India’s yarn exports, also declined, the report added.
Crisil projects India’s readymade garment (RMG) exports to dive 30-35 per cent this fiscal. In the March quarter, India’s garment exports slipped ~16 per cent and in April, the fall was a drastic ~91 per cent.
“The US and the European Union, which together account for 64 per cent of India’s RMG exports, are staring at a recession. The US is the worst-infected country now, and the pandemic-driven lockdown has ripped many apparel retailers there. Besides, a spike in unemployment and fall in personal incomes would cut spending on apparel,” the report said giving the reasons for the projected 30-35 per cent fall in RMG exports in fiscal 2020-21.