Apparel Industry Heading For Disaster: CMAI Survey

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Unless immediate steps are undertaken to permit unfettered and uniform opening up of all shops, market complexes, and mall (while maintaining social distancing and health check norms), as well as factories, and the banks step in to assist the industry, Indian garment industry is heading towards an unmitigated disaster, a CMAI survey has revealed.

Indian garment industry is going through an unprecedented crisis, and millions of jobs are at stake. In such a situation, timely intervention by the Government and Reserve Bank of India (RBI) can save these jobs and help industry to survive, says the survey on 'How badly has the garment industry been hit?'

The survey conducted by The Clothing Manufacturers Association of India (CMAI) amongst its members at the end of May 2020 showed a stunning decline of sales during the month of May. Compared to the corresponding period of May 2019, the members surveyed indicated a drop of 84 per cent over last year – and that too, primarily because some factories had started manufacturing masks and other PPE products.

The domestic apparel industry has reported almost 'zero' production of regular products in May 2020. 

The situation has hardly improved even after the easing of restrictions and attempts to open up the economy. "Our survey showed that only 22 per cent of the garment factories across India have started functioning by end of May. Factories are operating at an average 25 per cent of their capacity. Forty per cent of the factories that have started functioning are engaged in the manufacture of current essential products like masks and PPE kits.

On the question of getting help from banks, the CMAI survey revealed that as of May 15, of those who had applied for the additional Working Capital Loan (COVID Line) as directed by RBI, only 26 per cent had actually received assistance from their bankers. The balance 74 per cent still had their applications in the ‘processing’ stage.