COVID-19: After Demo and GST, Textile Industry Braces For Another Impact

Workers and employers of textile industries in Coimbatore and Tirupur districts are staring at another challenge. COVID-19 has added further insult to injury in an industry struggling to revive itself. The continuous fall in exports due to the impact of the pandemic and non-payments of already delivered goods has started to impact stakeholders. Major accessories imported from China are hitting a standstill and production is set to go down drastically. Taking stock, exporters have decided to scale down production by up to 80% over the next week.

COVID-19 was the industry’s third disaster after the ill-conceived demonetisation and the imposition of Goods and Sales Tax (GST). The Tamil Nadu Government is left clueless about immediate measures that would support the industry. However, they are waging a lone battle, at least for now.

Stagnant Exports and Domestic Market:

Both Coimbatore and Tirupur districts are hubs for textile exports in the country. They were expecting to steady themselves with China facing a severe crisis. However, tables stand turned with China staging a comeback from the impact. Local buyers and those from different countries, have issued instructions to delay deliveries, resulting in an adverse impact to exporters, manufacturers and workers. A static market implies workers losing jobs in the near future.

M.T. Muthurathinam, president of Tirupur Exporters and Manufacturers Association (TEAMA), told NewsClick that buyers are in no hurry to receive the finished goods. “The present situation does not permit any cargo to be sent through ship or air. We are getting no new orders and we don’t expect them in the near future. If there are no new orders, the industry will further take a beating. The low demand in domestic market will also hurt us badly,” he added.

Export Houses’ Apprehension:

Renowned export houses have decided to stop work for the next three months. The decision was taken as a precautionary measure as any transmission of disease from the delivered goods will have long-term impacts on the industry. “The local manufacturing units are taking precautionary measures to prevent the spread of the pandemic. But, in the event of a spread happening here, the impact would be huge. So, manufacturers here have decided to scale down the operations by up to 80% in the next one week. Many small units have already shut down operations as a precautionary measure”, Muthurathinam added.

Scaling down operations will have a severe impact on workers, as the workforce is largely contractual in nature. With the government yet to announce any package to the suffering workers and the industry, panic has set in.

Workers Feel the Heat:

Over the past two weeks, workers have been losing jobs. They could be in for worse as the crisis on the brink of escalation. Manufacturers depend on exports, and things are expected to worsen given the impact in European countries.

G Sampath, general secretary of the Tirupur Baniyan Workers Union said, “The small units in the districts have already stopped their operation for want of orders. The workers have no jobs for more than ten days now and their suffering is set to increase after March 31. With no measures to help these daily wage workers being announced by the government so far, their agony will increase.”

The industries rely largely on accessories imported from China. The import has stuck now and is expected to continue in the coming months. Such a situation will extend the crisis of the workers and the industry.

Another Crisis?

Coimbatore is frozen, there are no major activities and panic is evident with the local markers, malls, jewellery shops instructed to shun operations.

Krishnamoorthy, the Coimbatore district secretary of the Centre of Indian Trade Unions (CITU) said: “The Union Government has failed miserably in its economic policies since they came to power in 2014. They were criticising other for their continuous failures and now the Prime Minister has found a new scapegoat in COVID-19. With no specific relief measures announced, the economic loss for the district will be very huge. The state government seems to downplay the impact of the virus as well as the economic crisis,” he added.

Exporters associations have demanded an exemption on repayment of loans and taxes for the month, from both union and state governments. However, with the PM announcing no specific measures in his address to the nation and the state government clueless, workers are left to fend for themselves.