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Covid 19 , views by CMAI

Published: March 30, 2020

India’s Garment Industry is currently going through its worst ever crisis. And this is across the board – both Exports as well as Domestic.

The Domestic Industry is largely consisting of manufacturers in the MSME Sector, and even within this sector, the Micro and Small units would form the majority. These units would typically be operating on wafer thin margins, surviving on a day to day basis, with little or no safety network in terms of capital or savings. Any disruption of business of an extended period would typically result in massive cut downs, laying off of labour, and ultimately closure of the units.  

The current lockdown of the country – it is expected that the lock down would continue till end April at the very least – is a death blow to these smaller units. Most of them will simply not have the resources of surviving for any length of time even after the markets reopen. This is because even after they reopen, markets are highly unlikely to return to its normal buoyancy for at least another 10 to 12 months, if not more. Payments against current dues are likely to be delayed by Retailers, who are fighting their own battles for survival. Pending orders, even of goods that were ready to be shipped when the lockdown was announced, are also going to be cancelled, or, in the best case scenario, going to be taken delivery of in a delayed and staggered manner.

This season is a goner in any case. I don’t think anyone is even looking at it. What worries me is the ability of many of the members to handle the situation going ahead.

I estimate the markets to show a minimum of 30-40% drop in business till at least August, and then take another 10 to 12 months to come back to where it was prior to March 2020.

I anticipate massive job losses, especially at the production floor level and Marketing departments.

The only way to avoid this blood bath is massive Government support. Some good measures have been announced, but much more needs to be done. Government has to realize that unless business is supported, economic conditions cannot be improved.

Views shared by –  

Rahul Mehta, Chief Mentor , CMAI ( The Clothing manufacturers association of India)

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