India's textile and apparel exports in 2022 end in bleak

India's textile and apparel exports in 2022 ended in bleak. From the second half of 2021 to the first half of 2022, it saw sound performance both at home and abroad. However, from the second half of 2022, India's textile and apparel exports gradually turned to negative growth, especially that of cotton textile and apparel exports. One reason rested with the high cotton prices in India, which discouraged downstream consumption, and the other reason was the weakened external demand. As a result, India's textile and apparel exports ended up shrinking by 4.3%.

High cotton prices dampen downstream demand

India's total textile and apparel exports in 2022 were $37.6 billion, down 4.3% from last year. Among them, the export of textile was $20.9 billion, down 13.4% compared with last year, and the export of apparel was $16.7 billion, up 10% compared with last year. It could be seen that the decline of India's textile and apparel export was mainly caused by the decline of textiles. And cotton products such as cotton yarn, carpets and handicrafts saw most obvious drop.

It could be seen from the above chart that India's cotton price has been lower than that of cotlookA for a long time, and even lower than that of China. Since the second half of 2021, India cotton rose rapidly and even became the most expensive cotton in the world. Although the price dropped somewhat in the second half of 2022, yet it was still higher than that of other markets. The long-term high price had affected the trades of Indian's cotton textile and apparel industry to a certain extent. While new orders were gradually decreasing, more Indian enterprises shifted production of cotton products to other products. Therefore, cotton price in India was gradually under pressure. By mid-January, it was slightly lower than the cotlookA index, but the amount of orders remained thin.

Textile and apparel exports decline for six consecutive months, and cotton textiles exports decline for eight consecutive months

In 2022, India's textile and apparel exports declined sharply for six consecutive months, and cotton textiles recorded negative growth for eight consecutive months. The details were as follows:

From the above figure, it could be seen that India's apparel exports outperformed textiles and still showed positive year-on-year growth in November and December. While exports of major textiles continued to decline significantly year-on-year, especially cotton textiles. No clear signs of improvement was found from the trend of data changes, thus it was expected that India's textile and apparel exports may remain under pressure in the first quarter of next year. It was not difficult to see from the changes in the growth rate of textile and apparel exports that the proportion of cotton textile exports in 2022 declined meaningfully, and the export structure also changed somehow.

In terms of monthly changes, the proportion of cotton textile exports in the total textile and apparel decreased from 39.9% in November last year to 28.6% in December this year, down by about 11.3 percentage points. The proportion of chemical fiber textile exports fluctuated between 13-16%. Besides, apparel exports accounted for 49.2% in December, up 14.4 percentage points from November last year.

To sum up: The dismal exports of Indian textile and apparel in 2022 was mainly dragged down by the drop of textile exports in the second half of the year. According to the data of December, India's textile and apparel export hasn't seen obvious signs of improvement. Although the operating rate of yarn mills in India saw some improvement, Indian textile and apparel trades were very likely to see continued pressure in the first quarter of 2023.