COVID-19: India in Lockdown, Apparel Factories Closed

James Fallon and Mayu Saini
·6 min read

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NEW DELHI, India Prime Minister Narendra Modi on Tuesday mandated a complete nationwide lockdown, including all apparel and other factories, for 21 days from Tuesday midnight to help stem the outbreak of the coronavirus. Many parts of the country, including Delhi, had already been barred from holding public gatherings amid orders to close workplaces till March 31.

“If we don’t handle these 21 days well, then our country, your family will go backward by 21 years,” he said in a second public address on prime time television within the week. The total coronavirus cases in India rose to 536 by Tuesday evening, according to the Indian Council of Medical Research, with 10 deaths.

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Most factories and workplaces in India had continued to operate normally until last week, and industry analysts were critical that the response to the crisis was too slow.

“In India, till last week most factories continued to work without taking adequate steps to prevent occupational exposure to COVID-19. However, from today onwards, factories across most states in India have closed down till March 31 under strict directives from state governments,” the Asia Floor Wage Alliance noted on Tuesday. “Additionally, the Indian government has also issued an order stating that workers must not be terminated nor face a reduction of wages due to this crisis. The order, most importantly also states that workers are entitled to fully paid leave till this crisis is mitigated.

In the export hub of Tirupur, in Southern India, where there are about 10,000 manufacturing units, and which accounts for almost $4 billion of the $17 billion apparel export business of India, the situation is grim.

“Coronavirus has brought the production in India to a standstill, with invisible devastation happening all over the globe,” Raja M. Shanmugam, president of the Tirupur Exporters Association, told WWD. “The textile industry here has gone into devastation mode, the brands are not making payments till the orders come in, and these are on hold or getting canceled.”

About 36 percent of exports from Tirupur go to Europe, and 34 percent to the U.S, with the rest being to other parts of the world.

“Initially there was a shortage of accessories imported from China, but it seemed that more business would move toward India. But after the COVID-19 moved to Europe, everything started slowing down. March has been the toughest month so far, and as the last month of the financial year [the Indian financial year is from April 1 to March 31], it will bring the annual sales down by approximately 15 percent for 2019-20,” he observed.

Many of the workers at the factories in Tirupur live in hostels near the factories. “Provisions are being made for their safety, and care is being taken to keep sanitary conditions. Some migrant workers who were able to leave went back to their home towns.

“It is a perplexing situation,” said Shanmugam, “and everything is at a standstill.”

While factory closures across the country mean that migrant workers lose their daily earnings, union leaders have been negotiating for better conditions and worker safety.

In Karnataka, where there is a large cluster of factories, labor unions had been urging workers to refuse to enter plants well before the clampdown ordered by the state. The Karnataka Garment Workers Union has been negotiating that brands should make new order deadlines, and ensure paid leave to workers all along their supply chains. They have been negotiating that workers do not get dismissed or get pay cuts. Labor union leaders have been complaining of inadequate facilities, and a lack of space for social distancing of labor — whether it is in crowded factories, or their home spaces, which are often shared with other workers, or with members of the extended families that characterize India.

In smaller factories, the situation has been a little easier to streamline with a little forward planning.

Priyanka Modi, of luxury brand AM PM, which retails across India, has a factory in Noida in the New Delhi Capital Region and said they had begun to close down production in anticipation of the closure and help workers understand the gravity of the situation.

“We wanted to ensure that the workers had a chance to find safety, and although many of them wanted to return to their villages or their families in more distant places, we wanted them to understand that travel itself was unsafe. We offered them advances so they don’t run out of money, but the disruption is happening at all ends. The stores started shutting down — and we had to put all our orders on hold,” she said.

In Gurugram, factory owners said the initial sales drop of 20 percent earlier this month was only a simple indicator of what was to follow. “The need of the hour is face masks, and more protective gear but it is difficult to change our entire production schedule and start anew while we know that the labor is at risk,” said Nehal Gupta, a small factory owner in Gurugram. He explained that work has been slow because components were unavailable as the pipeline from China shut down. Accessories like buttons, zippers, etc., worth more than $140 million are imported into India from China, along with $360 million worth of synthetic fabric.

While many brands have put their orders on hold, or canceled them as countries suffer from the pandemic, Indian export houses are negotiating for extended payment terms. “In such difficult times, we have advised our members to cooperate with buyers by showing more flexibility toward deliveries, etc.,” said A. Sakthivel, chairman of the Apparel Export Promotion Council. “We are hoping that global brands will not cancel orders, but rather treat them as delays. Otherwise the livelihood of thousands of workers will be affected.”

Appeals are being made to the government for support. While several representations are being made for financial help to keep the flailing factories, and help keep the labor force, afloat, finance minister Nirmala Sitharaman’s relief measures on Tuesday were disappointing for the industry. The finance minister extended the deadline to file income tax from March 31 to June 30 and also announced that companies with less than 50 million rupees turnover would not have to pay interest, late fee or penalty.

Perhaps the greatest turn has been the loss of hope that some of the manufacturing business from China would shift to India. Instead, as the complete lockdown begins in earnest in India as of midnight Tuesday, with work places shut and people barricaded in their homes, industry analysts are predicting a fall in apparel production business of 20 to 30 percent in the coming financial year.

“Overall, it’s a very depressing scenario,” said Sharad Kumar Saraf, president of the Federation of Indian Export Organizations.

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