What's Happening?
India's fabric manufacturers are facing tightened margins due to increased imports from China. From January to September, India's weight-based fabric imports rose significantly, with China supplying nearly
60% of these imports at prices consistently below the global average. This trend is driven by higher raw material and energy costs, which have led to a global uptrend in prices for non-woven and similar fabrics. Despite the price increases, Chinese imports remain competitively priced, affecting the profitability of Indian manufacturers. In contrast, woven fabric imports have shown persistent price softness due to oversupply and intense price competition in global markets.
Why It's Important?
The influx of competitively priced Chinese fabrics poses a challenge to India's domestic fabric industry, potentially impacting local manufacturers' profitability and market share. As Chinese imports continue to dominate, Indian manufacturers may struggle to compete on price, leading to potential job losses and reduced economic activity in the sector. This situation underscores the broader implications of global trade dynamics, where countries with lower production costs can significantly influence market conditions in other regions. The ongoing price competition may also affect India's ability to invest in innovation and quality improvements, further impacting its position in the global textile market.
