Textile sector to impose one crore job cuts due to COVID-19

April 14, 2020 written by

According to the Clothing Manufacturers Association of India (CMAI), the textile sector of India has been severely hit by the ongoing lockdown and there could be as many as one crore job cuts in the industry if there is no support or revival package from the government.

CMAI has around 3,700 members employing over 7 lakh people. The traders’ body mentioned that most of its members do not have the kind of reserves to see them through 3-6 months of this magnitude.

The traders’ body estimated that if no assistance comes from the government, either in terms of wage subsidy or revival package, there could be loss of almost a crore of jobs in the entire textile chains.

Rahul Mehta, Chief Mentor, CMAI said, “If the garment industry closed down, it would impact the entire value chain from fabric supply industry to brand to the zipper and label industry. If you look at the entire textile industry, I see a job loss of one crore if nothing is done by the government.”

Further, he also appreciated efforts taken up by the textiles ministry such as asking all leading global companies not to cancel orders from the Indian exporters and sending positive vibes to the manufacturers.

According to Mehta, the traders’ body conducted a survey among its members and analysed that 20 per cent of around 1,500 responses said that they were thinking of closing down the business after lockdown. “At least 60 per cent of them anticipated a drop of revenue to the tune of 40 per cent, which is massive, if you look in terms of number of employment,” he added.

Agreeing with Mr Mehta, the Retailers Association of India also said that they received similar internal survey, where 25 per cent of participants said that if they do not receive any support from the government, they might wind up.

Kumar Rajagopalan, RAI, Chief Executive Officer said that around 50 per cent of the small retailers have said that they may not be able to open the stores. “If marginal and small businesses are shut down, it would have much bigger impact as the number of employees getting out would be higher. It would have a multiplier effect and all the allied industry could also be impacted.”

The COVID-19 pandemic has also severely affected the National Restaurant Association of India (NRAI). Anurag Katriar, NRAI President said, “In our business, the proportion of fixed operating cost expenses are very high, which means when you have zero revenue, your losses are very high. We are fighting a battle for survival and we do not know how long it is going to last and what is the ultimate image of how we would shape up in future.”

 

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