The apparel and textile industries in India and Vietnam have fully recovered
Recently, according to data from the Indian Ministry of Industry and Commerce, from April to December 2021, total apparel exports were US$11.13 billion. India’s total merchandise exports in December reached US$37.3 billion, also reaching the highest monthly value of the year.
The Indian Apparel Export Promotion Council (AEPC) said that judging from the recovery of global demand and the stability of orders from various brands, India’s apparel exports will continue to rise in the next few months, or reach a record high.
Textile bodies said exporters have strong orders from global brands and buyers. The Apparel Export Promotion Council (AEPC) said apparel exports have rebounded this fiscal year, with exports rising 35% in the first nine months to $11.3 billion.
During the second wave of the epidemic, apparel exports continued to grow despite local restrictions affecting business in the first quarter. A statement released by the agency noted that apparel exporters are seeing rapid growth in orders from brands and buyers around the world.
The company added that apparel exports will hit record highs in the coming months, driven by active government support and strong demand.
At the same time, Vietnam’s textile and apparel industry in 2021, after experiencing heavy losses from the epidemic in the first three quarters, benefited from the government’s relaxation of control measures in the fourth quarter, and exports recovered rapidly, achieving exports of US$39 billion in 2021, which is higher than that in 2020. The annual growth rate is nearly 12%, which has returned to the pre-epidemic level.
Thousands of employees had to leave the industry due to the impact of the epidemic. For example, at Viet Tien Garment Corporation, which employs 34,000 people, about 94% of its employees left. Many other companies in the south have also had to halt production due to the epidemic.
Reverse flow phenomenon occurs, and orders are less likely to flow in again.
Since the second half of 2020, the prosperity of China’s textile industry has rebounded significantly, showing a unique momentum compared with its global textile peers.
The fundamental reason is that China has achieved unprecedented success in fighting the epidemic, ensuring the stable operation of the supply chain and giving full play to the comprehensive advantages of China’s manufacturing industry.
At the same time, there is also a factor that cannot be ignored, that is, the textile industry in India and other Southeast Asian countries has been hit hard due to the epidemic, and a large number of orders have returned to China.
The person in charge of a textile company in Jiangsu said that some orders originally from India returned to my country due to the repeated local epidemics that led to insufficient operating rates of textile companies.
In recent years, Indian companies have posed a great challenge to Chinese companies in mid- and low-end home textile products. India is particularly good at mid- and low-end projects. Raw materials are cheap and labor costs are low. In addition, China also has tariff restrictions, resulting in an unusual flow of such projects to India. many.
According to customs statistics, my country’s textile and clothing exports maintained growth from January to July 2021, with total exports of US$168.35 billion, a year-on-year increase of 7.8%, 2.2 percentage points higher than the same period last year, and the two-year average growth rate was 6.7%.
Among them, from January to July, my country’s textile exports were US$80.25 billion, a year-on-year decrease of 10.8%; but clothing exports were US$88.10 billion, a year-on-year increase of 32.9%.
Now that the epidemic in Southeast Asian countries has been brought under control, orders have begun to flow back to the local areas steadily.
It is expected that with the vaccine already available, the possibility of Southeast Asian textile and apparel orders flowing into China again this year is relatively small.
As overseas production capacity will gradually recover, and affected by various factors such as freight, raw material prices, and industrial safety, it is expected that the export growth rate of the textile industry may slow down.
Be wary of the credit risks behind the reverse flow of orders
If you just think that orders will be lost due to the reverse flow of orders, you may be oversimplifying the problem. In fact, with the transfer of orders, crises are everywhere and risks are hidden. The following credit risks are prone to occur during the order transfer process:
1. Cancel the order or request a substantial profit reduction:
When there are a large number of suppliers for buyers to choose from, the buyer’s status will be improved, and significantly lowering prices is the most common tactic.
Exporters who choose to agree will lose a lot of profits or even lose money on the transaction.
If you choose not to agree, once the buyer cancels the order or refuses to accept the exported goods, the losses will be even more severe and it is easy to fall into a dilemma.
2. The last big deal, blackmail, ended the relationship:
A large number of claims cases show that there are countless export companies that have suffered losses on the last big order. When a buyer has found a next buyer, there are many people who intend to end the cooperative relationship and change suppliers, regardless of years of friendship, and take advantage of the opportunity to extort money.
3. Entanglement in the form of trade disputes:
Trade disputes cost not only money, but also time, energy and emotions from both parties. The most common trade disputes are when the buyer withholds payment, refuses to pay or even makes counterclaims on the grounds of quality problems.
International lawsuits are too expensive, and settlement is the best outcome. If a settlement cannot be reached, export companies will easily suffer a loss of both money and goods.
Be prepared for danger when you are in peace, and be prepared for danger. Although the current production schedule for foreign trade orders is fully booked, exportCompanies should still take a long-term view and make early plans for future orders.
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