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‘The garment industry will witness very tough time, may take six months to a year for normalcy’

Rakesh Grover, Managing Director, Groversons and President for Intimate Apparel Association

Rakesh Grover Managing Director Groversons“The after effects will be tough. Already the industry was going through a difficult time but after this, there will be a hard time because payment cycle will be affected, raw material supplies will be affected as the supply chain is affected, factories are closed and even if production begins, how will we continue production as we need a lot of raw materials and different ingredients to complete garments. To procure from China or India at the moment is difficult as labor returned to their villages and to get them back to work will be a big challenge. It may take a month or two to get them back to work. Even if we have orders production may not start in full strength for about two months post lockdown.”

How do you perceive the current situation from industry perspective?

Everything is in a lockdown and everybody is waiting to see how things move and. We have been asked to pay all wages, which is a challenge as it amounts to a huge amount because the garment industry employs thousands of people and. Paying salaries is a challenge and we will do it somehow but are not sure about next month if the lockdown continues. EMI’s are deferred but will need to be paid with the interest, so it is not that payment has eased.

Since we are procuring a lot from China, is this an eye opener not to depend only on one country for sourcing?

The aftereffects will be tough. Already the industry was going through a difficult time but after this, there will be a hard time because payment cycle will be affected, raw material supplies will be affected as the supply chain is affected, factories are closed and even if production begins, how will we continue production as we need a lot of raw materials and different ingredients to complete garments. To procure from China or India at the moment is difficult as labor returned to their villages and to get them back to work will be a big challenge. It may take a month or two to get them back to work. Even if we have orders production may not start in full strength for about two months post lockdown.

Payments will also be impacted as we don’t see them coming on time, so the cycle is affected. As for sales, consumerism will be affected. There will be less disposable money to spend and whatever disposable income they have would be more on conservation because it is war like situation. Hence, the future is uncertain because nobody knows what will happen in the next six months. That will have a great impact on demand. Demand, production, money and sales will all be affected. Therefore, the garment industry will witness very tough time, which may take six months to one year to return to normalcy.

Some leaders have suggested manufacturers in India should accept year 2020 did not exist in their book of accounts. What is your take?

This is not possible. It will break and ruin the system. This is illusionary I don’t see this as a possibility.

What they mean is given the present situation where everything is at a standstill with no cash flow, production etc, 2020 cannot be accounted for. What do you feel?

Because we have lost a month and the garment industry was already going through a tough time. We have lost the month of March, a month where we achieve our targets which amounts to a substantial amount of sales. Whatever we have lost, the next year will be tougher. We will have to work hard and do many things. I also see a lot of unemployment in the garment industry and exports. The whole world is in a lockdown and in the same situation hence, consumerism is low. There is less demand for products even exporters will have less orders which will have a great impact. Hence, we have to face a bad situation but we are hopeful we will overcome the crisis soon.

The government has been giving out some support and incentives to the textile industry. Do you feel the government has put in efforts?

Indeed, the government is trying to help us with whatever fashion but not to the extent that is required. But we cannot expect more from the government because they are also facing many problems as there will be no tax collection as there is no work happening. Hence, much is not expected from the government. Whatever they are doing, they are doing at their level best as they have to put maximum resources to the health facility. Whatever they are doing for the people, they are doing a good job. I do not expect much from the government in a situation like this.

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