Tirupur: The garment industry in Tirupur has been going through a rough phase for the past two years due to a combination of factors -- export policies, governmental apathy and market factors both at national and international level. Now they remain Clueless on how to combat the consequences during and after COVID-19 crisis.
Tirupur: The garment industry in Tirupur has been going through a rough phase for the past two years due to a combination of factors -- export policies, governmental apathy and market factors both at national and international level. Now they remain Clueless on how to combat the consequences during and after COVID-19 crisis.
Adding to their misery is the COVID-19 crisis which has brought the World to its knees. It's feared that the unprecedented crisis, could push the economy of Tirupur, back to square one.
Staring at a bleak future, Industrialist Kumar Duraisamy from Tirupur opined that "We are looking at a loss of Rs. 12,000 crores minimum. This is just the beginning. It's a war and damages of a war can be assessed only when it ends. Since the end is uncertain, we are not sure about the damages."
He added that the international scenario, mainly with regard to the US and Europe markets who are the major buyers, is gloomy.
"The outstanding payment for January-February of close to Rs. 3,000-4,000 crores is pending. As feared, the orders for March, April and May are getting cancelled, one by one. Even the shipments enroute are being revoked by the buying houses. Our minimum export per month is to the tune of Rs. 2,500 crores", he added.
Hinting on how China will take an upper hand post the lockdown period, Kumar Duraisamy said that "Shockingly, we are getting reports from China that their factories are up and running. So, even after the lock down, China would be ready to supply any amount of goods with a later payment date. China would want to turn the market condition to its advantage by giving the buyers more time and collect the payments later."
He added that buyers would want to get as much time and leverage as possible, so there is all possibility that our orders will be catered through Chinese market.
He reitrated that it is difficult to assess the magnitude of the loss at this point.
Even as the market conditions look gloomy, industrialists feel support from the government is not adequate. "The RBI has announced moratorium for three months, which is not enough. It will take another three months for industries to start functioning normally. It would at least take one year for businesses to start making money to repay loans. Industrial associations from Tirupur have requested the government to extend the moratorium to one year, which will give us some breathing space."
"Secondly, the issue of capital infusion; the government should grant us at least 25% of the capacity to keep industries operating, to avoid closure. The revival of industry is key at this juncture," said Raja Shanmugam, President, Tiruppur Exporters Association.
Another issue is the migrant labour population. Of the labourers in Tirupur, 2.5 lakh are migrants, mostly from North and East India. Though a considerable number had fled to their home towns, there is still a huge population left to fend for themselves in this crisis period.
"Only few companies have lodging facilities. Migrant workers in such factories will be taken care of. But a majority are employed through contractors, who have deserted them. Since they are contract labourers, a majority of them change work often. They don't stick to one company for more than 3 to 4 months. So, the companies also do not feel responsible for them",
says Muthurathinam, President, Tiruppur Exporters and Manufacturers Association.
He added that most of the migrant workers will have money to buy groceries or necessary items for maybe the next 10 days. Beyond that, they will be left with no money to feed their families, which will emerge as a major issue.
'Since the workers are from other States, the authorities there are requesting the industrial associations to take care of their people. We have got calls from the Odisha government to provide food and take care of their people. With the industry moving towards a huge financial loss, we can support the migrant workers only to a certain extent. There is a huge population which needs to be fed and this might become difficult after a few days. Hence, the government should step in and provide a solution. More than coronavirus, hunger is the issue here. In order to feed such people, the government should come out with suitable measures," adds Muthurathinam.
The steps that the government take now will decide the future of the textile industry and the lakhs of workers livelihood in the dollar city, opine the industrialists in Tirupur.