The Coronavirus shutdown will affect the Indian textile and apparel industry especially in Tirupur. The garment sector in Tirupur is heavily dependent on China for sourcing accessories. The present stock position could last till March. The total shutdown in China has disrupted the supply chain. The sector may hurt its margins if accessories are sourced from a trader in India or from an overseas market other than China. Accessories bought by Indian manufacturers from China are stuck as no deliveries have taken place after the Chinese new year since all units in that country remain shut.

For one, a decline in China’s imports of cotton yarn is possible, thus impacting the cotton yarn export business of India. This will divert India’s surplus cotton yarn to the domestic market, further reducing the price of cotton yarn. If China continues to battle with the coronavirus, Indian garment manufacturers will need to look at other alternatives, including local sourcing, which in turn may increase the cost of finished goods by three per cent to five per cent. In addition to this, identifying vendors in such a short time can take a toll on lead times, quality and cost. On an average, India exports 25 million kg of cotton yarn a month to China.