Optimistic Economic Outlook

Economy

Optimistic Economic Outlook

The second Covid-19 wave sweeping across India is a much bigger one than what we experienced in 2020, in terms of sheer numbers and the pace. The resultant curfews and lockdowns have once again created uncertainty in the industry, affecting business activity in many textile clusters. Moreover, lockdowns in Europe are also impacting textile and apparel orders to Indian exporters. However, the situation is not as bleak as it was in 2020. For one, the industry in India and globally has accepted that some form of restrictions, mini lockdowns will be the order of the day. The Centre has rightly pointed out that given the experience of 2020, state governments have better solutions and options than complete lockdowns. The central and state governments are in complete agreement that economic activity cannot and does not need to come to a grinding halt to contain the spread of the virus. Micro containment zones will prove more effective. And this is in light of the fact that the Covid-19 vaccination drive is on in full swing, and people are eager to get vaccinated. At least 70% of a country's population needs to be vaccinated to contain the spread of the virus. True this is not an easy task given India's vast population, but it's not an impossible task either. We expect that by June the spread of the virus will be significantly contained. And here is where the industry needs to play a role too, to ensure that its factories continue operating without a hitch. Industry associations and companies need to organise vaccination drives and camps for their employees and workers. More importantly, Covid-19 protocols need to become the order of the day, and should no longer be considered `the new normal'. Managements and workers need to be educated and made aware that social distancing, face masks (covering the nose and not the neck), sanitizers are now routine, there can be no laxity here. Companies should come up with ways to incentivise correct Covid-19 behaviour. Retail activity is expected to be impacted to some extent till the consumer is confident of again moving out. And here is where the retailers too have to think out of the box, and reach out to consumers with the right merchandise. Of course, ecommerce is booming more than ever. On the economic front, IMF has projected India's economic growth rate at a historic 12.5% for 2021-22, despite the currently raging Covid-19 wave. The US economic outlook is optimistic for 2021. The US retail sector is expected to witness more stability this year. China falling out of favour means even more opportunities for Indian textile and clothing exports. And not just exporters, domestic players too are busy investing in expanding capacities to meet the growing demand from a dynamic consumer base. Resilience and agility are the gamechangers!