The domestic apparel manufacturing industry is once again in the midst of a massive crisis as 77 per cent manufacturers are planning to reduce staff and jobs by 25 per cent.
What’s noteworthy is that majority of these manufacturers are down to 25 per cent of pre-COVID sales. Besides, 72 per cent of manufacturers are facing more than 50 per cent order cancellations.
This is according to a survey conducted by Clothing Manufacturers Association of India (CMAI) at the start of May 2021.
The survey further added that the May month is expected to be worse, with normalcy not expected to be restored before Diwali.
Talking about the labour situation, the survey says that more than 50 per cent workers (in most factories) have gone back to villages.
The industry, which went through a torrid time last year, was just about recovering at the beginning of 2021, reaching close to 80 per cent of its pre-COVID sales levels.
However, the study indicates that 55 per cent of the manufacturers achieved less than 25 per cent of their sales during April 2021.
The situation is equally grim on the cash flow front, with 72 per cent of the respondents receiving less than 25 per cent of their due payments in April, and another 12 per cent receiving less than 50 per cent of their dues.
What makes the situation more worrying is that as a result of regional lockdowns increasing across the country, 90 per cent of members believe May to be far worse than April, and 45 per cent do not expect markets to revive before Diwali.
Notably, more than 20 per cent do not see any revival before 2022.
Whilst fully supporting the various state Governments in their measures to control the pandemic, CMAI has urged the Governments, in particular the Governments of Maharashtra and Karnataka – two of the largest clusters of garment manufacturing – to give due consideration to the domestic garment industry as and when they contemplate the opening up of economic activity.