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A lot of Indian orders moving to China?The textile industry has long been hot!Industry: I have not encountered such a hot market in 20 years Feb 01, 2021
"These tablecloths were all made in India. I didn't expect Zara to come. I never saw so many orders before."

"As a domestic trader, the last time we had an order from India was four or five years ago."

Wang Huan, a sales manager at Hebei Gaoyang Rongtian Textile Co., told 21st Century Business Herald that his foreign trade orders have surged since September, the highest he has seen in his 20 years working at the factory.
It is worth noting that its domestic trade wholesale platform 1688 saw the largest increase in orders. "Last month, orders for towels reached 2 million pieces, and many of them ended up in India."

Since September, a number of large Indian textile export companies have been unable to ensure regular delivery due to the epidemic. Many orders originally made in India have been transferred to China for production, and some factories taking orders have started to purchase directly from China.
Chinese textile manufacturers have begun to receive many orders from India on domestic trade platforms.

The domestic trade platform received an order from ZARA, and the turnover soared 5 times

A home textile factory called Jianmuqingyue, also located in Gaoyang, Hebei province, also received a large order from India on the domestic trade platform 1688.
"In the three years since we opened our factory, we have received our first order from India, requiring more than 5,000 bath towels."
"Said Shi Songlin, general manager of the plant.

Henggang Home Textiles, a home textile factory in Jinhua, Zhejiang Province, has received an order from international brand ZARA on 1688, a domestic trade wholesale platform, for hundreds of thousands of tablecloths, which accounts for 60% of the company's total production so far this year. After receiving the order, its turnover has soared five times over the same period last year.


"These tablecloths were all made in India. I didn't expect Zara to come. I never saw so many orders before."

Henggang home textile general manager Shu Jiewu said.


Executives of the three home textile factories said they had opened new production lines, expanded their staff by two to several times and worked overtime overnight to ensure the Indian orders were fulfilled.


India textile industry to shed 10 million jobs




A growing number of textile orders are being cancelled or diverted to other countries, such as China, as many factories in India are unable to open as scheduled due to delays in controlling the epidemic.

According to Dyeing Encyclopedia news, the current domestic many clothing manufacturing orders have been arranged to May next year.




The Confederation of Indian Textile Industry (Citi) said in a letter to RBI Governor Das in July that overall demand is expected to fall between 25% and 50% this fiscal year due to The Covid-19 outbreak.

As a result of this demand, about 25 percent of textile and garment factories could close permanently, resulting in the loss of thousands of jobs.




The Garment Manufacturers Association of India (CMAI) also said this year that the textile industry could shed 10m jobs without government support.




The Federation of Indian Textiles Industries says India's textile industry is capital-intensive, but profits have long been thin. The next two years are likely to be even more difficult as the country's economic growth has slowed over the past few years and they have been struggling.




In FY19, the total size of India's textile and apparel industry was $162 billion, of which $37 billion was exported.

The industry is expected to grow to $350 billion by 2024 to 2025, including $125 billion in export output, with 30 million new jobs created, the Federation of Textiles Industry of India had forecast.




The textile industry has always occupied an important position in the Indian industry. In the late 1940s, the textile industry accounted for 46.2% of the total light industry output value in India, and since then the proportion has gradually declined.




More than 45 million people were employed in the industry in fiscal 2018, according to a study by the Brand Equity Foundation of India released in August.

By contrast, textiles accounted for 2 per cent of India's gross domestic product and 15 per cent of its exports in the 2019 fiscal year, making it an important source of foreign exchange earnings.




However, the textile and garment industry in India is rather dispersed, especially as 80% of the garment industry is small and micro enterprises. Moreover, India relies heavily on imports of raw cotton and man-made fibers, which incur high costs due to high tariffs. After the outbreak, the port was closed and transportation stopped, further hitting the textile and garment industry in India.




The state of India's textile and garment industry is only a microcosm of the Indian economy under the epidemic.

India's gross domestic product is expected to shrink 9.6 percent in the current fiscal year, the first contraction in four decades, according to the World Bank's South Asia Economic Spotlight report released October 7.



Order transfer, domestic textile and garment orders doubled


China is the world's largest producer and exporter of textiles and has an obvious advantage in the export of labor-intensive products, said Li Xinggan, director-general of the foreign trade department of the Ministry of Commerce, at a media briefing on October 14.


As the world's largest supplier of anti-epidemic materials, China has provided export guarantee of anti-epidemic materials such as masks to more than 200 countries.

But excluding face masks, China's textile exports are down by double digits this year."


Li Xinggan pointed out that China has made remarkable achievements in scientific coordination of epidemic prevention and control and economic and social development, taking the lead in resuming work and production, which has effectively guaranteed supply in the international market and supported the smooth operation of the international industrial chain and supply chain.

"At present, the Covid-19 epidemic has had a huge impact on the global economy. We sincerely hope that India can contain the epidemic at an early date and return to normal production and life."

Li Xinggan said.


China is still India's largest trading partner, with exports to China totalling about $9 billion in 2018, while imports from China amounted to $61.7 billion, leaving a trade deficit of nearly $52.7 billion.

India's exports of textiles and raw materials amounted to $1.84 billion, accounting for 11.1 per cent of its total exports to China.


China's orders for fabrics and textile raw materials have increased by more than 100 percent since May, according to data obtained by the 21st Century Business Herald from Alibaba's international website on October 14.

Orders for the clothing industry increased more than 200% year on year, and it is worth noting that the clothing industry achieved a threefold increase in July.


In the first three quarters, China's textile exports, including face masks, rose 37.5 percent to 828.78 billion yuan, according to customs data.



This will last at least two or three years




Chen Jing, a researcher at the Society for Science, Technology and Strategy, said that due to India's epidemic situation and the inertia of supply chain management, it is difficult for overseas companies to switch between producers at any time. This phenomenon is expected to last two to three years, but in the long term, high-tech innovation in the textile industry is the way forward.




According to the data released by the General Administration of Customs of China on October 13, from January to September in 2020, the cumulative export of textile and garment reached 1,515.67 billion yuan, up 12.2%, among which the performance of textile was particularly outstanding, up 37.5%.




According to Chen Jing, first of all, the transfer of orders is closely related to the Covid-19 epidemic in India. The production environment in India has been greatly disturbed, and the epidemic is difficult to end in a short term.




The total number of confirmed cases of CoviD-19 in India now exceeds 7 million.

Indian medical experts have said that according to the projected increase in cases, India will surpass the United States to become the world's largest cumulative number of new confirmed cases, India is facing a serious challenge in the fight against the epidemic.




More important, says Mr Chen, is the management of overseas companies' supply chains, which do not allow them to switch between China and India at any time.

'Once you have established a stable production process, you don't make drastic changes for no particular reason,' he said.

Now it is because India cannot deliver goods that overseas merchants will be forced to shift their supply chains to China.




'Once it moves to China, it will stay there for a while,' he said. 'Even if Indian producers say they can resume orders, it will be a slow process.'

Because enterprises need to carefully investigate whether it is "reliable", and after a period of time, overseas enterprises have adapted to the Chinese production system, including logistics, inspection, customs clearance and other processes.

If the customer eventually accepts the Chinese cost, the order may stay in China for a long time.




Chen Jing said that the textile industry is a very special industry, such as the production of towels, sheets and other products, the threshold is very low, almost all countries have this production capacity.

In recent years, with the rise of labor costs in China, there is indeed pressure for industrial transfer.

However, he analyzed that traditional industries are not necessarily low-tech industries, but to achieve the combination of high-tech and traditional industries, which is what China is good at.

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