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The situation is becoming difficult for the textile traders in view of the inflation in the country and the world. Traders say that almost every order for New Year shopping till September comes from the US and Europe, but this year it has seen a drop of up to 20 per cent. At the same time, due to the festive season in the domestic market, orders from across the country have declined. According to him, in view of rising inflation, consumers are now fully focused on essential purchases.
According to Rahul Mehta, Chief Patron of the Indian Textile Manufacturers Association, traders have received very few orders from domestic and foreign markets till September this year. He said that the kind of sales that come with the festive season have yet to kick in in the retail market. As far as foreign markets are concerned, the orders for the new year have come down by 15-20 percent. Regarding the domestic markets, he said orders have seen a drop of up to 20 percent.
Also read: War on inflation: ECB hikes interest rates to record 4%
Last year was a bumper sale
Regarding the drop in orders, traders say that last year’s bumper sales and this year’s fast-rising inflation have prevented consumers from buying more. At the same time, in countries like America and Europe, people’s shopping priorities are changing due to the impact of inflation. America’s central bank, the Federal Reserve, has again signaled that interest rates will remain high. However, the Reserve Bank of India expects inflation to come down further in the next few months.
If we go back to August last year, overall consumer price index inflation was 7 percent and apparel inflation was around 10 percent. In August this year, clothing inflation is above 5 percent and inflation is 6.8 percent. The problem for traders is that the cost of clothing has been consistently between 5-10 percent in the last one year.
Crisis on jobs too: Rahul Mehta said that traders are currently afraid to open new retail stores in view of the slowdown in apparel sales. When asked how this would affect jobs in the textile sector, he said that no one has done any major layoffs so far, but if the situation continues like this for another 3-4 months, the situation could worsen.
Clothing inflation in the country this year (percent figures)
Inflation of clothing for the month Total inflation
August 22 9.97
September 22 10.2 7.4
October 22 10.2 6.8
November 22 9.8 5.9
December 22 9.6 5.7
January 23 9.2 6.5
February 23 8.8 6.4
March 23 8.2 5.7
April 23 7.4 4.7
May 23 6.7 4.3
June 23 6.1 4.9
July 23 5.6 7.4
August 23 5.2 6.8