The government of India has released two stimulus packages in as many months for the benefit of the export industry which is going through a situation of extreme distress. The textile and garment which was already passing through a period of immense pain due to various reasons has been affected the most due to its reliance on the markets of the US for a majority of its exports.
In the beginning of 2008, the industry was affected the most by the rising crude oil prices and the depreciation of the rupee and towards the end of the year it was impacted by two other twin factors; the rise in prices of cotton due to an increase in MSP and the economic meltdown due to which consumer demand got affected to a very larger extent across the world.
To add fuel to the already raging fire was the fear of payments being withheld in the US due to increasing bankruptcies. According to a report of Dan & Bradstreet, apparel retail related bankruptcies account for nearly 8 percent of all retail trade related bankruptcies and the July-October period witnessed a 50 percent jump compared to the first six months of 2008.
All the major sector related associations have derided the two stimulus packages. They were also very much looking forward to seeing the second package fulfilling all the expectations that were lacking in the first, declared a few days earlier. The prospects of hundreds of thousands of workers loosing their jobs looms large over the industry in 2009, if the situation does not improve in the next few months.
Fibre2fashion News Desk - India
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