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India’s $15 bn garment affected badly by lockdowns

Jun 07, 2021
India’s $15 bn garment affected badly by lockdowns


The $15 billion garment export sector faced a big blow as many states in India announced lockdown and restrictions on industries due to the Covid-19 pandemic. Karnataka contributes 20% of the total value of garments to the overseas markets. But the state government announced a lockdown from May 10 to May 24 due to which the exports got affected. Other industries that fall under the category of essential items were allowed to function during the lockdown phase.

According to Rahul Mehta, Chief Mentor, Clothing Manufacturer's Association of India (CMAI), every state follows different norms and in Karnataka, as per the new lockdown regulations, garment producers are not allowed to work. He also said that an appeal has been sent to the state government to let the garment producers complete their previous export orders. He added that if the international orders are canceled, then it gets very difficult to replace them because of the rigid policies like bank facilities and letters of credit. Also, international brands are very particular about the delivery dates.

Countries like China and Bangladesh export around $130 billion and $30 billion, respectively, each year. India is far behind them in terms of volumes but, is still a major garment producing country. Rahul Mehta also confirmed that India’s garment export was around $16 billion in 2019 which has now gone down to $13 billion to $14 billion. This is the sue to coronavirus pandemic that has caused a reduction in the garment business. Mehta also confirmed that, anther hub for garment export, include Delhi-NCR has been allowed to operate garment industries with some restrictions but it is complicated because the rules of three different states apply in the region.

The garment manufacturing industry that employs at least 12 million people had to remove many people from their jobs. The multi-million-dollar garment manufacturing sector has been adversely affected by the pandemic. Europe and the US are the biggest markets for India's garment exports. This industry is largely made up of MSMEs and it is one of the worst hit due to the pandemic. Other hubs of the industry include Tamil Nadu, West Bengal, Madhya Pradesh, Punjab, and Gujarat. As per the industry insiders, the government funds also could not benefit them much.

Source – Business Today

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