China'S Factory Shutdowns Will Affect India'S Textile And Garment Industry.

The fatal coronavirus has been declared a global emergency medical event and affects the global manufacturing industry at the same time. The epidemic also affects the textile and garment industries, and China plays a central role in the global supply chain.

According to the press statement of the India Garment Manufacturers Association (CMAI), the shutdown caused by China's coronavirus will also affect India's textile and garment industry. The general situation in China and the uncertainty of production begin to pose a major problem to India manufacturers who rely on the supply of raw materials in China. At the same time, the global clothing brand will have to consider other manufacturing destinations, such as India.

CMAI lists a series of effects of coronavirus on the textile and garment industry in India.

1, India's export to China is reduced.

On average, India exports 2000-2500 kilograms of cotton yarn to China every month. The price of cotton yarn in the domestic market has dropped by 3-4%, because traders expect that China's demand will be reduced due to the general situation in China. The further extension of coronavirus will lead to a decline in China's cotton yarn imports, thereby affecting India's cotton yarn export business. This will transfer the surplus cotton yarn from India to the domestic market and further reduce the price of cotton yarn.

2. Synthetic textiles and decorations

India imports $460 million worth of synthetic silk and $360 million synthetic textiles from China every year. It also imports more than 140 million dollars worth of accessories, such as buttons, zippers, clothes hangers and needles. India has no domestic supply base to meet the needs of so many raw materials.

Due to the epidemic, China's textile factories have ceased operation since the lunar new year. If the epidemic continues, India garment manufacturers will need to consider other alternatives, including local procurement, which may in turn increase the cost of manufactured goods by 3-5%. In addition, in such a short period of time, suppliers are likely to be affected in terms of delivery, quality and cost.

3, global demand for protective masks increases.

China is importing a lot of medical protective equipment, including surgical masks and protective clothing, to the world. Sales of such products in other Southeast Asian countries and even western countries have increased sharply. The supply of such products can not meet the demand.

In January 31, 2020, the government of India banned all exports of personal protective clothing, including clothing and respirators, in order to avoid shortages in India. However, nearly a week later, the ban was lifted to help China fight the disease.

4, India's synthetic value chain can't benefit.

The government of India has reinforced the national synthetic textile industry by abolishing a 2.5% anti-dumping duty on pure terephthalic acid (PTA). However, Hubei and many parts of central China (manufacturing center for raw materials) are in a state of stagnation. Therefore, at present, it is impossible to import PTA from China, and manufacturers are still forced to rely on domestic supply to meet their needs.

5. Transfer garment orders from China

In January, buyers from Europe and the US usually went to China to negotiate with next month's clothing exporters. However, because of the panic of coronavirus, most buyers are looking for alternatives.

One factor that still benefits China is that many companies have already made clothes suitable for spring and summer. Workers often go home on holidays before and after the Spring Festival (just before the outbreak), so the company plans to cut production during this period.

However, if this situation continues in the next few months, buyers will be forced to seriously explore other options. Bangladesh and India will gain advantages before Vietnam, Kampuchea or any other Southeast Asian supplier. India has a complete supply chain, so it is among the best in the competition. On the other hand, India garment manufacturers have neither scale nor cost competitiveness to prove that they are reliable buyers.