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US and EU are the most affected countries due to global recession, which comes as a bad news for India. India has most outsourcing deals from the US. Even our exports to this country have increased over the years.

Recessions are the result of reduction in the demand of products in the global market. Recession can also be associated with falling prices known as deflation due to lack of demand of products. Again, it could be the result of inflation or a combination of increasing prices and stagnant economic growth in the west.

There is a decline in the employment market due to the recession in the West. There has been a significant drop in the new hiring which is a cause of great concern for us. Some companies have laid off their employees and there have been cut in promotions, compensation and perks of the employees. Majority of the layoffs target the daily-wagers, who comprise 25-30% of a company's workforce. Textile industries are running on 75% of their capacities, or have reduced their three shifts into one. Exports for January have declined by 22 %. Companies in the private sector are hesitant to take up new projects. And they are working on existing projects only. Projections indicate that up to one crore persons could lose their jobs in the current fiscal ending March. The one crore figure has been compiled by Federation of Indian Export Organisations (FIEO), which says that it has carried out an intensive survey. The textile, garment and handicraft industry are worse affected. Together, they are going to lose four million jobs by April 2009, according to the FIEO survey.

During October 2008, as economic slowdown branched out, the total output of the textile sector came down. Simultaneously, investments in textiles were also decreasing, ultimately affecting the profitability of the industry. Textile and apparel industry in India is hit hard by heavy interest rates, less domestic consumption, and cancelled export orders. It is feared by the textile industry people that the slowdown would not improve in the near future, making 2009 a gloomy year for the Textile and apparel industries. A further meltdown will be a huge blow on the economy of the country.

Let’s hope for a good budget after election to cope up with the situation in the coming years.