- Textile Industry is facing a difficult time in ongoing pandemic and it is expected to lose Rs. 1 lakh crore and 1 crore jobs.
The Clothing Manufacturers Association of India (CMAI) surveyed its members to gain a sense of how the members faced up to the current circumstances and how they predicted the time following the lifting of the lock-down. An overview of the first 1500 responses shows that the domestic garment industry is facing a major crisis. Only a robust Government funding program will stabilize the Industry’s possible failure.
The Government has implemented several important steps, but it is clear that the industry needs more support, especially its MSME members, who make up 90 percent of the industry. Wage subsidy and support for working capital are the necessity of the hour for the long working capital cycle.
1500 plus CMAI Members with sales of approximately Rs. 60,000 crores and employing 400,000 plus people reported a drop in demand after the lockdown of over 40 percent.
On this basis, CMAI, which has nearly 4000 members primarily in the Domestic Branded Apparel Manufacturing sector, believes that the Domestic Apparel Industry could reach nearly Rs 1 lakh crore due to the lock-down and the anticipated major slowdown in economic growth once the lock-down is lifted.
The expected decline in revenue would threaten nearly 50 lakh employment in the apparel industry. With a global slowdown and the cascading impact on other Textile Industry sectors, Textiles & Apparels alone may lose nearly 1 crore of job.
Eighty percent of the participants who took part in the survey suggested that their company would need to be downsized immediately.
The move that CMAI leaders are likely to take to ensure survival after the lock-down is lifted is a minimum 30 percent reduction in the number of workers and about 20 percent reduction in wages for all continuing workers.
90 percent of members expect an inventory increase of 30-40 percent due to Zero sales during the lock-down. Additionally 100 percent of members are worried about collecting the lock-down from trade posts. 25% of the collections could become bad debts and members expected an additional pause in collections of at least 90 days. The suppression of working capital will lead to a delay in reviving factories and thus 75% of members expect normalcy on the market in FY 2021-22 alone.
Twenty percent of the members suggested they might consider closing their business because they would not have the extra money needed to pay for the expenses during the lock-up and the expected economic downturn.
CMAI has appealed to the Prime Minister, the Ministry of Textile, the Government of India, the Ministry of Finance, the Government of India and various State Governments to help domestic apparel manufacturers overcome the effects of lock-downs and possible job losses.
With the Indian Fashion Industry, the Indian wedding industry is also taking a plunge at this time.
“These 4 months which are affected due to Corona sees 25 percent of Indian weddings. The Indian Wedding industry has lost $ 8.5-10 billion in these 4 months. An average Indian Wedding costs an estimated 2.5 lakhs, hence this big loss. Most of the people have postponed their wedding and we are uncertain what will be average spend on weddings. We are hopeful of recovering around $ 4-5 Billion but the cost of the wedding will go low due to a lot of restrictions”, said Himanshu Kapsime, Founder Of Shaadisaga– A Wedding Solutions Company.