Coronavirus (Covid 19) is affecting the Indian textile and apparel industry. The prevailing situation in China is posing a major threat for Indian manufacturers dependent on the supply of raw materials from China. India imports $ 460 million worth of synthetic yarn and $ 360 million worth of synthetic fabric from China annually. It also imports accessories like buttons, zippers, hangers and needles. India does not have the domestic supply base to cater to such a huge demand of these raw materials.

Traders in India also anticipate curtailed demand from China. There may be a decline in China’s imports of cotton yarn from India. This will divert India’s surplus cotton yarn to the domestic market, further reducing the price of cotton yarn. With the epidemic, Chinese textile factories have stopped operations. If this continues, Indian garment manufacturers will need to look at other alternatives, including local sourcing, which in turn may increase the finished goods’ cost by three percent to five percent. In addition to this, identifying vendors in such a short time can take a toll on lead times, quality and cost.

However, there can be a positive impact on India as well. During the month of January, buyers from Europe and the US generally travel to China to negotiate with garment exporters for the next season. However, due to the Coronavirus scare, most of the buyers are looking at alternatives and India could emerge strong.