Clothing manufacturers in Tirupur and Noida are seeing up to 25% fewer new orders from global brands such as Mango, Zara and H&M after shutting down their operations in Russia following the invasion of Ukraine. Spanish fashion retailer Inditex – which owns Zara – has halted trading in Russia, closed 502 stores and halted online sales two weeks ago.

H&M has suspended operations in Russia, while Spain’s second-largest fashion retailer, Mango, has also temporarily closed its 120 stores in Russia.

“Clothes were shipped to Russia via Spain,” said Lalit Thukral, president of Noida Apparel Export Cluster. After all global brands have suspended operations, new orders have fallen by 15%, he added. “We are a little concerned about payments that have been stalled by the war between Russia and Ukraine,” Thukral said. The garment export cluster in Noida houses 3,000 units, with an annual turnover of nearly ₹30,000 crore.


“The war between Russia and Ukraine and the uncertainty surrounding it came at a time when garment exporters were gradually recovering from the business impact of Covid-19,” said Raja Shanmugam, president of Tirupur Exporters’ Association. New orders from brands like Zara, Mango and H&M have fallen by 25% since the invasion, he said. “Freight rates have continued to rise due to geopolitical tensions and exporters are bleeding,” Shanmugam said.

Shipments via the Black Sea have also come to a halt and exporters are now sending their clothes by air. The air freight rate has skyrocketed from 150 per kg to 500 per kg. “Buyers will not pay for rising freight rates,” Thukral said. Tirupur houses 2,000 knitwear export units and another 18,000 support units supplying knitwear companies.

“We are not worried about the fourth quarter of FY22. All orders are locked and everything is in place. We are worried about the first quarter of FY23. We don’t know how long the war will last and how the world will turn out respond,” he said. Shanmugam.

Tirupur is the largest garment manufacturing center in the country and its share of Indian knitwear exports is over 55%.

In the current fiscal year, Tirupur exporters expect an export value of ₹33,000 crore. They have targeted ₹40,000 crore in exports in FY23.

Garment exporters concerned about dip in global orders

This post Russia: Garment exporters concerned about drop in global orders was original published at “https://economictimes.indiatimes.com/news/economy/foreign-trade/garment-exporters-worried-about-fall-in-global-orders/articleshow/90362216.cms”

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