Temporary disruptions resulting from demonetisation and transition to the goods and services tax (GST) regime have made India’s apparel and fabric industry reel under pressure, says a report by ICRA. Volatility in apparel exports continues with global trade not showing any signs of improvement amid subdued demand trends in key importing countries, it said.
Moody’s is the largest shareholder in investment information and credit rating agency ICRA Ltd, set up in 1991.
Production declined by 1 per cent in the first quarter of fiscal 2017-18 in the highly fragmented fabric segment, which witnessed a de-growth — a phase of planned and equitable economic contraction — of 2 per cent in the previous fiscal.
Apart from demand pressures, high cost of raw material and currency movements also continue to affect the industry’s performance, which reflects in the profits of manufacturers over the last three quarters, according to a news agency that quoted the report.
ICRA expects the financial risk profiles of Indian apparel exporters as well as manufacturers focussed on the domestic market to remain steady in the near term. (DS)
Fibre2Fashion News Desk – India