Textile Industry Review & Outlook - May 2021

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The textile industry, and indeed the world as a whole, is still feeling the effects of the COVID-19 pandemic. The past year has been challenging for all sectors; it has also provided the time to make changes for the better. In this report, we will look at how the sector is performing globally and our predictions for the months to come.
Closed Factories Causing a Ripple Effect
We are turning our attention to India, one of the countries most impacted by the global pandemic. Textile and garment factories were forced to close down as the number of new cases continued to increase and are expected to reopen in June. However, as one of the leading textile and fabric providers worldwide, the closure of factories has had a ripple effect across the globe. Orders from India typically taking 30 days are now taking 70, and the entire industry is slowing down.
However, it isn't all doom and gloom for the Indian textile industry. Due to long-standing international politics, many European countries and suppliers in the US are not turning to China for their fabrics. Besides, China has also faced unprecedented disruption and shutdown in the past year, causing compounding effects throughout the entire supply chain. Pakistan is also losing customers as the quality of the materials is below standard. The COVID outbreak in Bangladesh, too, meant orders were short. Therefore, many companies are sticking with their Indian suppliers or moving over to Europe.
India & Turkey Seek New Deals
Moreover, at the end of May, Finance Minister Nirmala Sitharaman announced her Production-Linked Incentive (PLI) scheme would cover thirteen different sectors. The system was introduced at the start of the pandemic last March and covered nine industries, but the textile industry is also included after the latest announcement. This should help to boost the textile sector and increase India's competitive trade. Preparatory negotiations with India and the EU are currently underway, with a deal expected to be made by the end of the year.
India isn't the only market looking to expand, as Turkey is also seeking post-COVID deals with international companies and brands. Currently, Turkey is the fifth-largest supplier of textiles globally, expecting to export $30 billion worth of textiles materials by the end of 2021. This could be the most significant post-COVID growth seen in any country.
Turkey also has an agreement with the EU, which came into effect in 1996, which has helped boost the sector in these times. The government has also been working in line with the EU Green Deal, further improving its leading position as many international companies seek green partners.
Making Steps Towards a Circular Economy.
Indeed the global textile industry, known to be one of the largest polluters in the world, is pushing its linear boundaries. Currently, 87% of all textile fiber input follows this linear model, ending up being either incinerated or landfills. On top of this, the sector produces 79 trillion liters of wastewater and accounts for up to 10% of the world's carbon dioxide emissions. However, the world is hoping for the market to become a circular economy, and we see the first steps towards this. For example, the EU's latest Circular Economic Action Plan focuses on putting legislation in place to complement this circular model.  
Clothing and garment businesses are also pulling their weight. H&M, a leading fast fashion company, is one of the notable companies involved. It is looking at becoming more sustainable and climate-positive by 2040. The company started using the material Agraloop Biofibre made from food crop waste in many items in its recent Spring 2021 collection. H&M has also just opened an online second-hand clothing store called Sellpy in twenty European countries to promote the reuse and recycling of old clothes.
Other companies are following the same eco-friendly trends, and it is the direction the textile industry is headed in the future. A UK non-profit organization, Wrap, has launched Textile 2030 at the end of April, aiming to transform the fashion and textile industry into a climate-neutral model. May marked the first whole month of the initiative, and thirty-five fashion retailers have joined so far. The Swiss company Muntagnard is also focusing its efforts on creating sustainable clothing lines. An Australian start-up company called BlockTexx has also become the world's first commercial plant designed to recycle fast fashion waste into raw materials.
Dip to Come Before Textile Industry Recovers
However, before the industry fully recovers, we can still expect a dip in the global market. Although the re-emergence of the key China and India markets is helping to reset the flow of global supply chains, the world is still currently suffering from knock-on effects. According to the Global Textile Machinery market Report 2021, the market is expected to slump by -30% in 2020 and after that. The report suggests that the industry will reach 10.9 million units by 2027, representing a 9.1% compound annual growth rate (CAGR) over the seven years.
Potential job losses off the back of the pandemic could further hinder the industry's recovery. The media has reported that 10 million Indians have lost their jobs in factories because of COVID, and 97% of households in the country have reported an income loss. Changes in the supply chains alter the costs of materials and salaries for workers, while employees have to work harder to keep up with the increased demand yet smaller workforce. Many are then getting angry and protesting over pay, resulting in violence at some textile factories. Only at the end of May, a woman was shot dead in Lesotho during an angry protest that got out of control. This is not the first of violent and upsetting stories during these difficult times.
Therefore, while the end is in sight, there is still a lot riding on the next few months and years before the global textile industry sees any real growth and returns to a sustainable, more eco-friendly reality. However, once it gets there, the future looks green and bright.