The decline on demand for retail garments and made ups, in exports and dom. Retail, has affected the Indian fabric manufacturers. The cotton fabric output has shrunk to the lowest rate, since last 4 years; and is down to a combined 11.4% from a year ago.

Also, with the break on the growth in domestic Retail segment and with corresponding down-streams unlikely to see a sustainable 'rebound' soon; the Output of textile mills [esp. the spinning and fabric mills] is likely to slide down further in Q1 of 2009. It is time to pull the belt much-much tighter for next 2-3 Quarters could even be worse. Retailers, and reality, will remain under pressure.

Textile exports

Due to cut down in textile /clothing by the global retail chains, the expected and enhanced buying interest from overseas buyers for Christmas season did not come through.

This has negatively impacted the textile exports from India, which have shown a decline of about 10% for Q4 of 2008. Other than the appreciation of Dollar versus the rupee, there is no marginal relief for textile exports. The export demand and orders, for apparel and textiles, for spring-summer 2009 will remain subdued.

Overall, the short and medium term sentiment in textile sector will continue to remain weak over next 2 Quarters of 2009, and the real stepwise correction may not begin before mid-2009.

Note: The above Outlook and forecast for Textile sector is based on bi-monthly feedback provided to selective textile corporate, by Senior Textile and Clothing Industry Consultant, Mr. M. Tyagi