Pravin Mutha, MD, Cool Colors, Bafna Clothing
“Year 2020 scenario is the first time manufacturers have faced such a huge challenge. If they achieve even 60 per cent of sale compared to last year, it will be a great achievement and I presume that 20 per cent of manufacturers and brands will be wiped out. This is a big concern and the government needs to play an active and important role in this. The government has to understand the garment and textile industry is the second largest after agriculture and employs a huge amount of labor from all sections of the society. Hence, the government has to think exclusively for MSME’s and textile and garment industry, like restriction of customs on import, large format stories to source only from Indian market etc.”
What do you feel is the current status of the garment and textile industry in India?
The current situation is one of the worst we have seen till now. Everything, specifically for the garment and textile industry is at a stand still. Goods have piled up with the garment and textile manufacturers and orders have been cancelled. Manufacturers had increased production compared to their regular production as Ramazan had come in early retailers and distributors were unable to pick up causing a tough time in terms finances. This will create a cash crunch in the industry.
The industry is passing through challenging times but do you think this situation is a lesson for us to look out for other sourcing and not be over dependent on China?
I don’t agree that we depend on China as far as the cotton industry is concerned cotton is brought from within India. We do import some exceptional fabrics and accessories from them. As far as the rest of the world is concerned, yes they do depend on China. So it is a good that there might be a shift from the Chinese market to the Indian market. There is a positivity as far as buying is concerned. Manufacturers like us do not depend on China and I would like to request manufactures and large format stores who produce their goods in China and Bangladesh to support Indian manufacturers.
Should they look at India as another hub from where they can procure?
Quantity is a concern but if there are orders, Indian businessmen will increase their capacity. I feel quantity will not be an issue but price points will be in comparison to China because India has redone the labor laws and rentals, rate of interest and electricity are high for investors to put up factories. I am sure the government will look into this and we do not have a say as it deals with the laws but where price points are concerned, we will have to face stiff competition from China.
The fear is this crisis might see small manufacturers pulling down shutters.
I completely agree but the positive side is that a lot of small manufacturers do not have their own factories, we call them merchant manufacturers. They source from job workers hence the job workers are facing a tough time as the government is asking them to pay salaries without working and the job workers do not have much margin. So the government has to rethink this. As for small manufacturers, the readymade market is completely credit-oriented hence, manufacturers are in trouble with inventory piled up and they are unsure of monetary returns. It will be very tough now and might take six months to be normal.
Many industry leaders have suggested manufacturers should take away year 2020 from their book of accounts. Your take.
I too agree with them. Year 2020 scenario is the first time manufacturers have faced such a huge challenge. If they achieve even 60 per cent of sale compared to last year, it will be a great achievement and I presume that 20 per cent of manufacturers and brands will be wiped out. This is a big concern and the government needs to play an active and an important role in this. The government has to understand the garment and textile industry is the second largest after agriculture and employs a huge amount of labor from all sections of the society. Hence, the government has to think exclusively for MSME’s and textile and garment industry, like restriction on customs for import, FDI and LFS’s to source only from Indian market.
The government has given some incentives do you think they are enough? What are your expectations?
The government has done nothing. Their announcements are a complete trap. I will explain this with two examples. They announced they will contribute to the PF amount on two conditions. First, the unit must employ less than 100 people and the 90 per cent of salaries should be less than Rs 15,000. Is this possible? On the other hand we are being told to improve our employment, invest more etc. Have we sinned employing thousands in our factories? The government should support us like they are supporting others. Why this discretion of units with less than 100 employees? The second one is deferments of EMI’s. This is also the same. EMI’s have been deferred for three months but later we will have to pay with the interest. Instead of deferring EMI’s by three months they should have extended the loan period by three months.