BANGALORE, India — The Indian government and the central bank unveiled a second economic stimulus package earlier this month, but executives said it’s unlikely to help the beleaguered textile industry.
“The government’s second stimulus package is totally disappointing for the textile and clothing industry,” said R.K. Dalmia, chairman of the Confederation of Indian Textile Industry. “The global economic crisis has eroded demand for textile products.”
Indian apparel exports dipped for the third straight month in October, mainly due to weak demand in the U.S., its biggest market. According to Rakesh Vaid, chairman of the Apparel Export Promotion Council, apparel exports from India in fiscal 2009 ending March 31 are likely to fall 9.4 percent to $8.78 billion from $9.69 billion in 2008. Citi estimates that about 700,000 jobs were lost in the textile industry last year. In a recent report, India’s industrial production unexpectedly rose 2.4 percent in November from a year earlier, after declining in the previous month for the first time in 15 years, although economists said it will likely not be sustained.
Rajendra J. Hinduja, managing director of Bangalore-based Gokaldas Exports Ltd., said he expected Indian textile exports to decline 25 percent during 2009. AEPC executives estimate the drop will be 24 percent.
The knitwear industry, based in the southern town of Tirupur, which exports most of its production to the U.S., has been especially hard hit by the global crisis. A. Sakthivel, president of the Tirupur Exporters’ Association, said about 20,000 workers in the town could lose their jobs. There has been a 30 percent decline in orders for Tirupur factories, another executive said.
Citi’s Dalmia noted that in addition to international developments, India’s textile industry had been negatively affected by recent government decisions. These measures include increasing the minimum support price of cotton and delaying reimbursement funds to companies that have spent money on machinery upgrades.
“On the other hand, other major textile-producing countries like China and Pakistan have taken significant remedial measures to address their industry’s problems,” Dalmia added.
“The bank rate cuts are of no use as nobody is looking at taking loans,” said D.K. Nair, secretary general of Citi. “The industry has no working capital to invest. Companies have faced losses for the last six quarters. They cannot repay loans. Their only concern is survival.”
Nair said the textile and clothing industry has demanded, among other things, a two-year moratorium on loan repayments and an increase in duty drawback rates. These demands have not been conceded by the federal government, so far.
“The Indian garment industry faces the grim reality of continued losses of over 120 billion rupees [$2.44 billion at current exchange] per month due to forced cuts in production caused by the slowdown in local and global markets, rising input costs and neglect by the government,” said Rahul Mehta, president of the Clothing Manufacturers Association of India.
Mehta said the average production cut in the industry is 15 percent since September, forcing closures and job losses.
Indian government officials have said they are considering giving further concessions and incentives to specific sectors of the industry, including textiles. These are expected to be announced next month.
Big companies like Gokaldas Exports have managed to hold on.
“We will touch last year’s top-line figure [$269 million] in exports,” said Hinduja.
However, Gokaldas and most companies have export orders only up to March or April.
“The U.S. saw the worst retail sales in 40 years over Christmas last month,” said Hinduja, adding he expected buying from retail chains to remain low for the next few months because of high inventories.
Hinduja said the Mumbai terror attacks in November also resulted in foreign buyers reducing their visits to India. Visits are down by about 50 percent and buyers preferred to hold meetings in places like Hong Kong, he added.
The outlook for India’s economic growth in the near term is gloomy. The Asian Development Bank has forecast that India’s growth rate will decrease to 7 percent in fiscal 2009 ending March 31, down from the 9 percent growth posted in the last fiscal year.
Given this domestic scenario and high rate of retail bankruptcies in the U.S. last year, the outlook for Indian textile exports remains depressing. Nair of Citi said the first half of 2009 will be worse than it is today, but he hoped a revival would come in the second half of the year if President Obama is able to implement measures to rejuvenate the U.S. economy.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)