Global recession affects India's cotton industry

With a global recession dominating world headlines, it is only a matter of time before the fashion and manufacturing industries become affected. In India, one of the world's leading producing countries of cotton, prices for cotton have risen dramatically in the past year and many textile mills are in the crisis, according to the Southern India Mills’ Association (SIMA). Most high street and international conglomerates will have some link to Indian manufacturing, from Topshop to River Island to Katharine Hamnett.

In a release, SIMA chairman K.V. Srinivasan said cotton prices were 20 per cent higher than in January last year, and yarn prices were 10 per cent lower than in the corresponding period last year. “Textile mills will normally procure their entire cotton requirement during November–January. But during this season, the mills are not in a position to buy cotton owing to high prices and lower realisation of yarn prices.” The textile spinning sector had been reeling under recession since the beginning of 2007 owing to the appreciation of the rupee against the dollar and high interest rates.

Countries such as China and Pakistan did not face such problems, so they increased their share in the global trade. Meanwhile, India’s growth declined from 12 per cent to five per cent in the last year, according to SIMA.

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