India's export of textiles and garments may decline by 40 per cent in the following months. The Coronavirus has halted shipments. The spread of the virus, especially in the United States, and leading markets of Europe like Spain, Portugal, Italy and even the United Kingdom has led to cancellation/deferment of orders on a very large scale. Buyers and major retail shops importing home textiles from India have put further business on hold. Exports of cotton yarns and fabrics have virtually come to a standstill. Besides affecting order flows, this could potentially result in the renegotiation of realisations as well as an elongated receivables cycle for the exporters.

Urgent policy interventions/support are needed in order to provide fiscal relief and ensure credit flow with an extension of the Remission of State and Central Taxes and Levies (RoSCTL) scheme to cotton yarn and fabrics so that India’s competitiveness is enhanced at a time of falling markets. Also, there is a need to extend the interest subvention of three per cent beyond March 31, 2020, and also cover cotton yarn within that to ease the financial burden. A relief package is urgently needed. Demand for textile products and domestic sales have also come to a grinding halt.