The nation’s attire industry might take a hit of round Rs 1 lakh crore as a result of lockdown and the slowdown within the financial system later, says the Clothing Manufacturers Association of India (CMAI).

Apparel industry may take a hit of Rs 1 lakh crore: CMAI

Deeply involved by the financial affect as a result of lock down within the nation attributable to COVID-19, CMAI carried out a survey amongst its members to get a sense of how the members have been dealing with as much as the present circumstances and the way they have been forecasting the interval after lock-down is lifted.

An evaluation of the primary 1,500 responses, signifies the numerous disaster is brewing within the Domestic Garment Industry. Only a complete assist bundle from Government can cushion the potential collapse of the Industry.

Several necessary measures have been introduced by the Government, however it’s clear that the industry, particularly its MSME members which represent 90 p.c of the industry, wants extra assist. Wage subsidy and dealing capital assist for the lengthy working capital cycle is the necessity of the hour.

CMAI’s members make use of round 400,000 individuals. The survey says there could possibly be a drop in demand after the lockdown of at the least 40 p.c.

Almost 80 p.c of the members who participated indicated they’d down-measurement instantly, with a minimal 30 p.c discount in staff and a 20 p.c lower in pay.

Around 75 p.c anticipate normalcy out there solely in 2021-22. CMAI has sought a 50 p.c wage subsidy, as much as Rs 5,000 a month for 5 months. And, for the provident fund and ESIC contribution of staff and employers to be accomplished by the federal government for 3 months, for these getting not more than Rs 15,000. Also, for all banks to supply an curiosity subvention of 5 per cent on complete borrowing, with 25 p.c further working capital to be made obtainable.

The survey additional acknowledged, “90 percent members of the association expect 30-40 percent increase in inventory due to zero sales during the lockdown. 100 percent of members are worried of collection from trade post the lockdown. 25 percent of the collections may become bad-debts and members expected a minimum 90 days additional delay in collections.”

20 p.c of the members, have indicated that they may think about closing down their enterprise, as they won’t have the required further sources to pay for prices throughout lock down and the inevitable slowdown within the financial system.