The conflict in Russia has resulted in a lot of economic backlash across the world as sanctions against Russia by the US has resulted in a global decrease in trade and commerce.
Gujarat is bearing a large chunk of the economic blow from the conflict. Due to lowered demand from Europe as a whole and rising interest rates, manufacturing units in Gujarat are feeling the pinch as production is dented as a result.
Gujarat is known globally as a manufacturing hub and is a leading player in textiles, yarn and denims among other industries. “The global downs have impacted discretionary spending. Therefore, Gujarat’s exporters in most have witnessed a twin blow with both, B2B and B2C, demands going down in the US and Europe,” stated Pathik Patwari, president Gujarat Chamber Of Commerce and Industry (GCCI).
Ever since the conflict in Ukraine began, exports of cotton yarn have declined nearly 60 per cent between April and December 2022. Accordion to a report by the GCCI textiles committee, the blame lies on prices of gas and power increasing nearly six times, leading to industries in textile-producing countries like France, Portugal, Spain and Germany having to cut down manufacturing, leading to lowered demand for raw materials from Gujarat.
“This is especially true in the case of cotton and polyester yarns,” shared committee chairman Rahul Shah. In ways, cutting down costs at every step in the value chain has dented the textile growers in India. “Even denim manufacturers have reported declining third-quarter revenues due to eroding demand,” he added.
Similarly, exports of dyes have also been impacted since production has become unviable due to shrinking demand for the procurement of dyes and intermediates by European textile manufacturers.
“Manufacturers cannot pass on costs to end consumers at a time like this. As a result, major names in the segment have either shut down or are operating at 30% of the capacity,” shared Bhupendra Patel, chairman, Chemexcil, Gujarat.
