MUMBAI : The total credit available to the Indian textile and clothing industry in December 2020 was ₹1.62 trillion, down nearly 20% year-on-year, according to a report by credit bureau Crif High Mark and the Small Industries Development Bank of India (Sidbi).
This, according to the report, was due to the suspension of manufacturing activities immediately after the lockdown in March 2020. The report states that the number of active loans by volume in the sector stood at 426,000 as of December 2020.
The industry has observed a quarterly decline in non-performing assets (NPAs) over the past two years, from 29.59% in September 2018 to 15.98% in September 2020. The bad debt rate in December 2020 has increased 0.94%, almost 8% less than NPA in December 2019.
Navin Chandani, Managing Director and Managing Director of Crif India, said that despite the pandemic, the top thirteen regions active in textiles and clothing manufacturing made up 80% of the credit portfolio as of December 2020.
“In India, every state has a unique contribution to the garment and textile sector. The Indian government announced a special economic package in May 2020 under the Atmanirbhar Bharat program which is expected to benefit a large number of small-scale entities, including weavers and artisans across the country, â€said Chandani.
The report says that over the years, clothing has contributed the majority share of exports, followed by home textiles and fabrics. However, export credit in December 2020 is 25% lower year-on-year, largely due to a drop in exports due to the pandemic.
At the state level, Maharashtra holds the largest share of the credit portfolio with 25% of the sector’s credit portfolio, he said.
Never miss a story! Stay connected and informed with Mint. Download our app now !!
