India: The second wave of covets is the final blow to the country’s textiles

“Breaking the heart.” The World Health Organization (WHO) defined the situation in India as early as the week before the second wave of the devastating Covit-19. The new outbreak of the virus is a final blow to the country’s textile industry, which has already deviated from the priorities of groups in the industry when it comes to organizing their products. The economic impact of the second wave is beginning to be measured: some experts predict that the country’s economy could regress to what it was twenty years ago.

India breaks world record for new corona virus cases In recent weeks, there have been more than 330,000 infections and 2,263 deaths (up to the United States), according to government data. India reduced its defenses against the evolution of the epidemic, which ended in January; Now, UCIS is on the rise and the lack of medical supplies such as respirators is warning the world.

Country Kovid was called one of the growing engines after the crisis. According to the latest estimates of the International Monetary Fund (IMF), for this month, the country’s economy will grow by 12.5% ​​this year and 6.9% by 2022, which is more than 5% of emerging markets.

With the economic recovery, the country’s textile industry should start to thrive again after Govind’s victory in the West in the first half of 2020. After the cessation of production in China, international fashion giants began to look for new places for their products. Look for flexibility and speed.

From the very beginning, India was subject to scrutiny by global fashion companies who cut off orders from the country’s factories. Nearly 80% of the Indian textile and garment industry is unorganized and relies on credit and cash payments, which has led to mass closures and changes, especially in small firms.

States like Gujarat or Punjab were implemented Factories Act, A legal entity since 1948 that allows changes to the law by express to increase the maximum daily working hours to twelve hours with the aim of controlling redundancies. Wages in the garment industry across the country fell 57%, According to data from the Business Human Rights Resource Center.

The situation was so complicated that it was motivating India withdrew from countries where fashion brands were most eager not to cancel orders Those who are already in production are paying.

The factory workers have returned home for fear of being locked up

Already in March, when Europe was simply shut down, the Garment Export Promotion Council called on brands, stores and buyers in Europe and the United States to continue to support “industry” at these crucial moments. It will severely affect the livelihoods of thousands of workers. “

But the brands were canceled and layoffs came. Manufacturer of Gorakaldas, Cape, Zara, Adidas or Abercrombie Immediate effect of 1,200 workers, A decision directly linked to the cancellation of H&M orders. Another example of cuts is that Raymond, one of the nation’s largest manufacturers and distributors, laid off 800 of its 7,000 employees.

The fashion legends avoided their vision from India, and their preference was for proximity, In Asia, only places like China, Vietnam and Cambodia were on the list of supplier countries. The Indian textile industry suffered due to the characteristics of its production (seasonally as protagonists) in Europe after the first wave of Govt. Now, a second local wave is destroying it.

The rating agency is postponing the recovery of this sector until 2023

The data comes from across the country: Surat’s Textile Merchants Association (Fosta, in its abbreviation in English) estimates revenue is down 40% since the beginning of the year. Cotton exports fell 13% in the first quarter, textile production fell 60% to 70% and garment exports fell 65%, according to estimates by Moody’s-owned Igra Appraisal. The same source expects that the recovery of the Govt front positions will not come until 2023.

This included, in addition, the dismissal of workers for fear of a new prison: in Surat, about 40% and 45% of workers have left factories in recent months. In Manesar or Gurugram, the discrepancies range from 15% to 20%.

That horrible imprisonment last came last Monday: The Karnataka state government (located in Bangalore) sentenced him to fourteen days in jail, Explicitly stating that garment factories should be closed. The Textile and Garment Workers Union (GTWU) has criticized the move, which allows agriculture and construction to continue to operate, and has demanded the reopening of 50% capacity or compensation.

In reports to the local newspaper Mint, The Clothing Manufacturers Association of India (Cmai, for short) said that “large sections” of small manufacturers are closing their businesses and are being pressured by rising raw material prices. “The impact of the second wave will be very severe as conditions are already very weak for many operators,” the organization said.. “Manufacturers have always relied heavily on credit, controlling liquidity and the industry’s growth prospects,” he said.

Beyond the fashion sector, the second wave puts the entire Indian economy in a critical situation. The Global Times, One of India’s leading newspapers, It warned that twenty years ago the wealth of the country might be turned back.

Textiles and textiles account for 2% of GDP (GDP) and 7% of industrial output And 12% of the country’s exports. It is the second largest employer with 45 million direct workers.

Unlike other neighbors, the industry is steeply integrated: India is the world’s largest producer of cotton and jute, and the second largest producer of polyester and silk.

The country is the fourth largest supplier of clothing and textiles to the United States and the European Union. Exports to the world’s largest power were $ 6.816 billion last year, 15% lower than in 2019, according to data from the U.S. Census Bureau. Sales to the EU (including footwear, jewelry and perfumes) were 6,865 million, down 23%. For Spain, it ranks ninth, with sales of 736.1 million last year, compared to 1.09 billion in the previous year.