Domestic Clothing Industry facing Biggest Crisis in 50 years: CMAI Survey
14 May 2021: The Clothing Manufacturers Association of India (CMAI) is the Voice of the Domestic Apparel Industry. With 4,000+ Manufacturing Members and over 25,000 distributors, agents and dealers as members, CMAI has a Pan India footprint. CMAI Members employee more than 1.2 Million workers in factories and 4 Million+ employees across the entire Domestic Apparel value chain.
Covid-19, has stalled the cycle of the Apparel Value Chain. CMAI has been interacting with Members to understand the impact of the Covid-19 on the Domestic Apparel Industry.
With the extension of the Lockdown, CMAI conducted its second major survey among its members – this time specifically to understand their ability to pay wages and salaries to their workers over the next few months.
Results of the Survey:
# 98% are concerned about the welfare of workers: Workers (karigars) are the most important members of the MSME unit. For business owners these workers are an extended family.
# 92% have paid wages and salaries to their workers for whole month of March. Although factories closed down on 18th March 2021. Members have collected only 30% of the receivable for March, leading to significant cash crunch. Many of the Members have had to take loans to pay March wages.
# Majority Members will not be able to pay Wages for April & May 2021.
# 67% (2/3rd) of the Members will not be able to pay wages for April. With Zero sales and collection, NO support for additional Working Capital from Banks, factories don’t have the funds to pay wages. Non-payment of wages could lead to significant unrest.
CMAI has appealed to the Government to save the MSME Industry. Immediate support on Direct Wage Transfer or Mandatory disbursement of Working Capital Loan is required on an SOS basis.
# 31% of the Domestic Apparel Factories may close down (this is a 50% increase since the 1st week of the Lockdown). With the extended lockdown during the peak consumption (festive) period, the grim reality is MSME businesses are seeing no future and are wanting to shut operations. Considering that close to 8 million people are employed by the Domestic Apparel Industry, almost 25 Lac workers will be out of job. The job losses in the Textile value chain will compound further and almost 1 crores job may be lost in the Textile Value Chain.