With consumer spending bouncing back in the US, India has a rare opportunity to capture American fashion market. However, growing COVID-19 cases are forcing garment factories in the country to either shut down or work at half capacity. As per NBC news reports, India accounts for 16 per cent textile imports by the US and about 5 per cent apparel and accessories . Though the percentage of textile and apparel exports to the US is quite small, India is still a major exporter of rare gems to the country. This makes it difficult for the US to move its supply chain outside India, says Mary Lovely, Senior Fellow, Peter Institute for International Economics, and Economics Professor, Syracuse University.
Supply chain issues threaten growth plans
As per US Commerce Department, consumer spending in the US increased by 10.7 per cent in the first quarter of this year. Brett Rose, CEO, United National Consumer Suppliers, believes, this is the perfect time for India to capitalize on the growing demand. However, most of its garment factories are expected to remain closed till June 7, impacting supply of manufactured goods, textile and mill products, she adds.
Sonia Syngal, CEO, Gap informs, her company is already facing supply chain and raw material challenges from countries including India. Owner of West Elm and Pottery Barn, Williams-Sonoma too has several orders pending from India due to production issues.
Impact on jobs and deliveries
Not just manufacturers, the global pandemic has also stressed India’s garment workers. Over 1,200 workers employed with Gokuldas Exports lost their jobs as the apparel manufacturer closed one of its factories due to cancelled orders. The company is now working overtime to meet order deadlines, informs Sivaramakrishnan Vilayur Ganapathi, CEO.
The pandemic is also causing logistic delays for Indian manufacturers. Orders that could be earlier delivered within 30 days are now taking 70 days, says Rose. This is leading to cargo ships being overstocked, hiking up shipping prices. However, Rose expects this pressure to ease soon as companies are bound to reach an inflection point where they can bear no more challenges.