In the last month, a Delhi NCR-based buying house connecting Indian garment makers with fashion brands in countries like the US witnessed approximately an 80 per cent drop in orders. Newer designs for upcoming seasons by this firm, not named to protect the identities of its employees, have also been scrapped as its international buyers have either shut shops for the next few months or are recycling older designs.
“Our clients in the US have been cancelling their orders, even the ones which have been produced, packed and ready to ship,” said one of the employees.
“While some have slowly started reinstating their orders, it is less compared to what they’ve cancelled. On top of this, these international brands with several stores have been asking factories in India with liabilities and heavy expenses to give them discounts,” the person added.
Despite this, the workload is still the same because the firm is trying to stay relevant in the face of uncertain times. “There is more pressure to stay relevant. Everyone is paranoid and trying to put their best foot forward because we don’t know whether we’ll have a job tomorrow,” said a designer at the firm. The pandemic has dealt a blow to India’s labour-intensive textile and apparel industry across the supply chain during the pandemic, according to experts. Experts say that large brands are struggling with high inventories and are cutting back on plans for the next season.
“Large brands have around 80-90 per cent of their stores in malls which are not open. With the overall slowdown, these retailers are also sitting with a lot of inventory for the current season, and are pulling back purchases for their fall collections to help sell current stocks and also expecting demand to be soft,” said Rajat Wahi, partner at Deloitte India.
Exports in the textiles sector witnessed a steep drop in April. For instance, shipments from Tirupur plummeted nearly 90 per cent to around Rs 225 crore that month due to a combination of low demand and the nationwide lockdown, according to Tirupur Exporters Association executive secretary S Sakthivel.
“The global demand, whether it is the finished product or the raw material, has taken a hit and that demand was determining, to a large extent, our textile exports also,” said Federation of Indian Export Organisations (FIEO) director general Ajay Sahai.
Despite an appeal by Textiles Minister Smriti Irani in April to buyers not to cancel “a single order that has been placed”, 60-80 percent of orders placed in textiles and apparels have been cancelled, according to Sahai.
Domestic demand, too, is nearly non-existent, according to industry executives.
Textile producers in Panipat supplying to India’s domestic market are either shut or operating at output levels of 10-15 percent, according to Federation of Industrial Associations of Panipat (FIAP) general secretary Shree Bhagwan Aggarwal.
While the impact may not drastically hurt India’s GDP–textiles contributes to a little over 2 per cent of it — the major “cause of concern” is the potential damage it may cause to livelihoods, according to Sahai. The sector has been the second-largest employer after agriculture, expected to provide jobs to around 55 million people in 2020.
However, some producers attribute this to issues with getting access to labour during the lockdown.
Textile Association of India president Ashok Juneja said availability of labour was a “big issue” as many workers had gone back to their hometowns during the lockdown. He added manufacturers were now looking to train local women to offset this shortage.
“Labour is a major issue … I expect it will take some months for the labour situation to normalise,” said Aggarwal of FIAP. “While it is too early to tell how much labour has gone, one fallout of COVID-19 will be increasing (use of) automation (for reasons like maintaining social distancing)…this is on the cards,” said FIEO’s Sahai.
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