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Coronavirus impact on India’s textile and apparel

The global Coronavirus pandemic like many other countries has hit the Indian textile and apparel sector hard. A recent survey ‘Measuring Impact of Corona Pandemic on Indian apparel export industry’ by Rajesh Bheda Consulting (RBC), showed that India witnessed a US$3bn worth of shipment loss.

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Figure: The toll is huge as the country mainly exports spring-summer orders, meaning the period from January through March is peak production. Courtesy: betterwork

The toll is huge as the country mainly exports spring-summer orders, meaning the period from January through March is peak production.

Key aspects of the survey showed that the total value of orders canceled and on hold is US$1.49m per respondent factory. Worryingly, 56% of respondents said payments were delayed, whereas, in 19% cases, customers declined to pay.

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At the same time, out of the canceled orders, in 43% of cases, no payments were received. And in 35% of cases, only partial payment for the goods was received. while 22% said that the buyer had paid for the products.

“When we extrapolate the results of the survey at the apparel export industry level, this could result in export orders worth US$4.17 billion being canceled or put on hold. This amounts to almost 25% of the annual apparel exports from the country,” explains Dr. Rajesh Bheda, Managing Director of RBC.

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Industry leaders urge the livelihood of garment workers must be protected.

Raja Shanmugam, President of Tirupur Exporters Association, which represents the largest knitwear cluster of India, agrees with the analysis.

Raja Shanmugam said, “There should be a holistic revival package by the authorities to address the needs of the industry and thereby revival of the industry and the entire economy of the country.”

Although the survey was based on a relatively small sample of 60 responses, the results provide an insight into the scale of the challenge being experienced and its potential impact on India’s US$16-17bn garment industry.

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