According to a recent survey by the Federation of Indian Chambers of Commerce and Industry (FICCI), the textile industry in India is poised for continued growth in the next two quarters of the fiscal year 2023-2024, despite the economic slowdown in other developing nations. This positive outlook offers hope for textile companies in India, suggesting a promising future ahead.
According to the survey conducted by FICCI, 57% of the synthetic and cotton suppliers reported higher production levels in Q1 FY24. Many of them also reported a significant increase in production in the second quarter of the financial year.
According to the latest assessment, it was found that in the second quarter of the year, 80% of the respondents experienced a surge in the number of orders for greige fabrics and RFD fabrics they received. This positive trend is expected to continue into the second quarter, with high levels of optimism surrounding the demand conditions.
The Current Outlook
The outlook for growth in the manufacturing sector, particularly in textiles, apparel, and technical textiles, is anticipated to be above average. The current average capacity utilization in manufacturing stands at approximately 74%, indicating sustained economic activity within the sector. This figure is slightly higher than the reported 73% capacity utilization in previous quarters.
Looking ahead, there is an optimistic shift in the investment outlook compared to the previous quarter. More than 57% of participants have expressed intentions for investments and expansions in the next six months, reflecting a slight improvement from the previous survey.
The primary obstacle hindering the realization of the textile companies in India’s true potential is the constraint on demand, with more than 40% of survey participants identifying inadequate demand as a significant bottleneck. This limitation applies to both domestic demand and exports, presenting a major challenge. Additionally, factors such as high raw material prices, increased costs of finance, and disruptions in logistics and supply chains are impacting cotton suppliers’ and apparel manufacturers’ growth plans.
In the second quarter of the fiscal year 2024, 85% of businesses reported having either the same or increased inventory levels comparable to the previous quarter. On the export front, there is a positive trend, with over 48% of respondents reporting higher exports in Q2, compared to 33% in Q1 FY24. However, continued improvement in export demand is deemed necessary to align with the country’s growth aspirations.
The employment outlook appears stable, though, with approximately 38% of wholesale fabric suppliers online in India expressing intentions to hire additional workforce in the next three months.
It is worth noting that the insights shared in the FICCI survey are based on responses from over 380 manufacturing units spanning large, small, and medium segments, collectively contributing to an annual turnover of over ₹4.88 lakh crore.
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