An overview of Impact of Covid-19 on Indian Apparel Industry

1. Day (1)
Post Covid-19
Apparel Industry Way Forward
By Deepak Singh

2. Apparel (Broad categories in focus)
● Exports
● Retail
● Education (Local Institution in Apparel)
● Pvt, Govt. Semi Govt. Funded/Semi funded
Apparel Establishments viz. AEPC, ATDC, CMAI,
NIFT, Pearl, NITRA, ATIRA, SITRA,

3. 3. Covid-19 Impact(Apparel related organisations)
1 Exports
Severely Impact
● Orders Cancelled
● Largely buyer driven
● Workers Scattered
● Finished/Unfinished
Shipments also
Stuck till Covid-19
situation recovers
(3 to 6 months
Min.)
2 Retail
Medium Impact
● Manufacturing on hold
● Orders remain in hands
On hold.
● Can resume after
Lockdown
● Workers scattered but
quick turnaround
possible
● Made in India may take
Centrestage
● Intl. brands impacted
3 Education
Lighter Impact
● Apparel Institutions
shifted to digital option
and focused more on
theory & demo
● Faculty/Staff/students
resumes work from
safety of home
● Can be a big resource to
Sr. No.1 & 2 in
supplying scattered
workforce & fill in gaps
4 Govt. Estb.
Min. impact
● Staff largely confined to
safety or shifts for
workplaces
● For cancelled orders Govt.
can step in for any losses
and provide bailout
● Workers not scattered
● Salaries Safe
● Can initiate Centre of
Excellence(COE) to Pvt.
businesses to rescue.

4. Exports (What Media Says)
Media report that COVID-19 has created a $2 billion hole in India's apparel industry. Hit hard by the economic fallout
of the COVID-19, the Indian apparel industry looks poised for a slow death, and if the situation does not improve by
May, many companies will be shuttered. India's exporters also face a crunch as COVID-19 pummels the economy.
Abrupt national lockdown has put 50m jobs at risk in textiles, shoe-making, jewellery and other consumer goods
sectors. Apparel exporters warn that an industry relief package is urgently needed to prevent millions becoming
jobless.
Media report on the impact of COVID-19 in Rural India. No Jobs or payments as economic activity in Tamil Nadu's
garment hub has come to a halt, with workers and farmers struggling to make ends meet.
Media report that millions of home-based garment workers in India are at risk of missing out on support to
compensate for the loss of their livelihoods during the COVID-19 lockdown measures. Many factories in India
subcontract part of their production to home workers who are often unregistered, ‘hidden’ workers, and have no right
to a minimum wage, social security or healthcare from employers.
Global: Media report that six garment producing countries have jointly called upon global brands, retailers and traders
to consider all potential impacts on workers and small businesses in the supply chain while taking significant
purchasing decisions. Furthermore, factory owners' associations from Bangladesh, China, Cambodia, Myanmar,
Pakistan and Vietnam called on their global partners to honour the terms of purchasing contracts, fulfill obligations
therein, and not re-negotiate price or payment terms.
Source: https://cleanclothes.org/news/2020/

5. Exports (What Media Says)
Source: Economic TimesSource: Economic Times Source: Cleanclothes.org

6. Exports (What Buyer’s Say)
BRANDS DEMAND 50% DISCOUNTS AS SUPPLY CHAINS DESCEND INTO WILD WEST:
Apparel Buyer’s, including luxury brand GUESS?, Inc. and Danish company BESTSELLER are
among dozens demanding huge discounts on completed orders.
● Danish brand demanding 25% discounts for completed orders. Bestseller, which said it was
"under huge financial strain" when we put presented our findings, had profits of €372m on
revenues of €3.5bn according to recent accounts.
● US retailer Meijer telling one supplier. “it is either 50 per cent discount or outright
cancellation.”
● Italian luxury brand, Guess? – a Sustainable Apparel Coalition member - emailing suppliers saying
it will not honour payments for orders - even those already shipped. Guess’ total revenue for fiscal
2019 (ending February) grew 10.4 per cent year-over-year to US$2.6bn

7. Exporter’s (Wishlist)
Responsible Business Association Amfori has
come up with guidelines(download) for their
members indicating that they should proceed as
much as possible with payments as usual, not
cancel orders.

8. Retail Industry (Status)
● Fashion and lifestyle brands are offering steep discounts and pushing
sales online amid an inventory pile up due to the closure of stores
nationwide following the Covid-19 virus outbreak
● Mall operators seeks Finance Ministry, IRDA intervention for bad
businesses.
● Retailors want Govt. to bring back migrant workers to Augment Supply
chain.
● Govt. to set up 20 Lakh “Surakhsha” Retail Shops to supply daily
essentials
● online purchases have declined by 15% as consumers cut back on
discretionary

9. Educational Institutions(to create support system)
● Institutions have pivotal role to play to provide much needed workforce
to needy industry
● Institutions can create ready accessible database of trained manpower
to assist industry to rescue on immediate basis.
● NIFT can provide latest technological advances & data/methods for
quick turnaround of industry in completing orders.
● Institutions like ATDC with required Skilled workforce to step in and fill in
skill gaps with industry partnership having Pan India presence.
● Offer digital education for Garment workforce on Covid-19 Do’s & Don'ts
to tackle garment workplace.
● Can be of great help to both exporters and retailors.
● Focused Innovation for Sustainable future.

10. Pvt. Semi/Govt. Establishment for Apparels(Activate)
● Institutions like AEPC, CMAI, NITRA, ATIRA, SITRA to come out with
white paper for creating necessary action to be initiated or to be
initiated by Govt.
● Govt. funded Institutions such as NITRA, SITRA, ATIRA which are
centre
of excellence to come forward to share idle machinery established
through Govt. funds and should be put to use for Technical
Manufacturing.
● Increase transparency and access to subsidies and incentives for
organisations assisting Nation in need of hour.
● Apparel councils & Association to unite together and approach buyers
in one voice rather approacing individually.

11. Thank You!