Businesses worldwide have been hurt by the COVID-induced economic crisis. Indian textile and apparel manufacturers are suffering severely and some regions of the country facing a huge struggle. The garment exporters in Noida and Greater Noida are the worst of times as they claim to be fast losing business to Bangladesh, Sri Lanka and Vietnam. They are claiming- “over 20% orders have already been diverted to these countries.”
Due to COVID-19 restrictions, and workers reluctant to return from their hometowns to factories as India’s second wave remains severe, which is a reason manufacturers losing their business, according to an Economic Times report.
Some apparel manufacturers have been making PPE kits as a stopgap measure, but exporters claim they cannot sustain without major international orders. Noida and Greater Noida together have around 3,000 garment manufacturing units.
“Most migrant workers left the city during the panchayat polls, while some left during Eid. Now there are more COVID cases in the villages and people want to return. But worker capacity in most factories has gone down to 40-50%. While no one has stopped work, things have slowed down,” NAEC President Lalit Thukral said.
“International buyers, on whom our exporters are dependent, are diverting orders to other Asian countries. We have already lost around 20% of business to Bangladesh, Sri Lanka and Vietnam, we need to regularize the situation fast and bring workers back,” he added.
According to NAEC, many exporters are falling back on PPE manufacturing as a stop-gap activity, while some are just left with no orders to service.
“This is not a substitute for the core business of garments. We are now finding ways to reassure workers to return to work. As an apparel cluster, we have organized our oxygen bank. We have distributed oxygen concentrators,” he said.
“For our workers, there are isolation wards and oxygen beds at factories. We have also created a facility for COVID-affected workers to borrow concentrators and return them after use. We urge the government to make vaccines available for workers, which would give them the confidence to rejoin,” he added.
Thukral claimed that losing business at this time could result in long-term damage.
The western markets have revived and other garment manufacturing Asian countries are not as affected by COVID now as India is, so this year, there is a demand for readymade garments.
“We are losing out because there is concern among international buyers whether we will be able to deliver,” Thukral said.
Considering the misery the Apparel Export Promotion Council (AEPC) has made a fervent plea to Prime Minister Narendra Modi to declare apparel exports as essential services and exempt these exporting units from lockdowns across India.
Most of the apparel exports are season and fashion-sensitive, and their salvage value becomes zero if the production and shipment are not done in time. Considering the perishable nature of the product, apparel exports should be seen as essential services. Besides, many neighboring and competing countries have already accorded apparel exports the status of essential services, AEPC Chairman Dr. A Sakthivel wrote in a letter to the PM.
Due to the lockdown, if the units are unable to execute these orders, this will result, not only in the short-term loss of orders and export earnings but also a long-term loss of the buyers.
“Our competing countries like Bangladesh, Vietnam, Cambodia and Pakistan are making all efforts to take orders from these regions and if we lose our buyers at this point, they will not come back shortly,” Dr. Sakthivel said.
Indian apparel exports saw a 13% decline in 2020. “We were at around $16 billion in 2019. Now, we are down to $13 billion-$14 billion because of last’s year reduced buyer’s,” said Clothing Manufacturer’s Association of India’s (CMAI) chief mentor Rahul Mehta. CMAI represents 20,000 retailers who also manufacture as well as those who are purely manufacturers.