Olympic hiatus challenges India’s textile industry

China shut down emission-intensive industries prior to the Olympic Games to reduce air pollution in Beijing, and the silence was heard throughout the Indian cotton and textile industry. Chemicals and dyes used in India’s textile manufacturing shot up 25 percent in the two weeks following the shutdown. “Polyester and cotton dyes are some of the chemicals that come from China and are three times cheaper as compared to products available here,” says Ajit Lakra, president of the Ludhiana Knitters’ Association. The overall impact of China’s short-term clean air policy on India’s economy is yet to be determined.

Power and raw material woes persist in India this year; 33 major textile companies in India reported a cumulative loss in 2008 almost equal to the cumulative profit made in 2007, a sign of the global economic slowdown that has followed the rise in energy costs. Rising raw material prices, lack of government support and a decline in U.S. demand lead the list of barriers to growth.