In FY2021-22, India ranked as the fourth-largest textile producer in the world, exporting goods valued at $44.4 billion. Of this total, 45 per cent were destined for the US and the EU. However, since Q2 2022, demand for Indian textile products has declined 12.2 per cent year-on-year (YOY). This reduction has been driven by high inflation in key markets, coupled with the uncertainty created by the Russian-Ukraine war, and soaring cotton prices, all of which have severely affected export demand.

These factors have led to significant disruptions in the industry, resulting in a drastic fall in demand for textiles. As a consequence, many firms involved in the textile value chain across the country have either closed or downsized their operations.

However, the impact has not been uniform across the industry. Trading firms such as Parekh Textiles Pvt. Ltd., which serve as intermediaries rather than direct players in the market, have been less affected. These firms must adjust to market trends and facilitate smooth trade. Parekh Textiles Pvt. Ltd., a market-sensitive organisation, has a history of adapting to changing market requirements without compromising its mission and values. This situation is not entirely new; the world economy has faced recession before, and firms like Parekh have weathered the storm.

The economic outlook remains mixed. Some economists predict a high chance of recession in the US next year, and the Eurozone has already recorded a contraction of 0.1 per cent in Q1. These signs do not bode well for the textile industry, indicating that the current market condition may persist for the foreseeable future.

Nevertheless, it is not entirely bleak for India. Several opportunities for growth exist:

•   A global shift away from China for textile requirements presents opportunities for India.

•   The recently signed free trade agreements (FTAs) with the UAE and Australia could boost demand.

•   Improving cotton prices and good harvests may support the industry.

•   Excellent quality and variety of textile products in India could reach new markets with proper marketing and promotion.

•   Increased government support for the textile industry in this year’s Union Budget.

India has repeatedly proven its resilience and determination to succeed on the global stage. With these opportunities and its inherent strengths, it would not be surprising if the textile industry bounces back stronger and flourishes in the coming years.