Extension of Moratorium and Ease of Lockdown Restrictions Mandatory for Smooth Business
It has been more than five months ever since the Covid 19 stuck India and halted all manufacturing operations in the apparel export sector.
Even though lockdown restrictions have been removed manufacturing has not resumed fully because of unavailability of local transport which has made it difficult for workers to come back to work.
As a result only 42% of capacity is being utilized at the moment and most of the units are struggling to operate.
“Workers in Tirupur are not able to come because local transport is not available and migrant workers who want to travel from one district to another are also stuck,” said Raja M Shamugham, President, TEA.
Highlighting the current situation in Tirupur he said that currently the industry is on survival mode and to come back on performance mode the support of the government is congenial.
“We are requesting the Government to extend the moratorium for another 7 months, from 1 September 2020 to 31 March 2021,” he averred.
“The financial situation of Tirupur apparel cluster has not improved, they are not in a position to repay the loan and interest, and so extension of moratorium is must,” he added.
The extension of moratorium will be beneficial to the industry and banks, as well as will help the country’s economy.
The same has been written and expressed to Prime Minister, Ministry of Finance, Ministry of MSME and RBI.
“We are requesting the Government to extend the moratorium for another 7 months, from 1 September 2020 to 31 March 2021
Raja M. SHAMUGHAM, PRESIDENT, TEA.
Only 42% of capacity is being utilized at the moment and most of the units in Tirupur are struggling to operate.
Workers in Tirupur are not able to come because local transport is not available and migrant workers who want to travel from one district to another are also stuck.”
The MSME units, whose credit exposure is more than Rs. 25 crore, have been deprived of receiving the Emergency Credit Line Fund now.
Substantiating on the same, said by denying the benefit, the real intention of the Government to extend crucial support to all MSMEs and bail them out from the impact of COVID-19 pandemic would not serve and, therefore,
RBI should relax the condition and permit even those MSMEs which are having credit exposure of more than Rs. 25 crore also get 20 per cent of outstanding credit by keeping a maximum limit of Rs. 25 crore.On being asked the situation of business he replied,
” There has been a negative growth of around -62% in business in the first quarter, however, the ray of hope is that new queries from buyers have started coming in.”
Many manufacturers have expressed that good queries for products are being noticed from the American and European buyers for many product categories.
“Even in my company we have noticed that while earlier buyers were asking for 1 to 1.5 pieces they are now asking for more 2.5 lakh pieces,” pointed Shamugham.
And what could be the reason for this as the pandemic is still not over.
He replies, “It seems that buyers are testing if India can deliver higher volumes as the anti-China sentiment is prevailing all across.
This is an opportunity as in the future many buyers would want to pull out business from China and might shift to other sourcing countries India being one of them.”
In this situation India definitely needs to gear up because this is an opportunity and if worked upon well might prove to be highly beneficial for the industry in the long run.
“We need cash liquidity so that we can work on such orders and survive, if the Government supports the industry now it will be a win-win situation for everyone”
said he.China has always remained a dominant player in apparel export but post Covid 19 many countries have expressed outrage and willingness to move business away from China and distribute it to countries like India, Vietnam, Bangladesh and Indonesia.
The impact of Covid 19 is well evident as many retail chains in the key international markets have filed for bankruptcy.
Tirupur is a well-known and established sourcing destination for casual wear knitted garments and has a good scope of growth as most of the people all across the world prefer to work from home.
After the lockdown was eased up the cluster is trying to get back to normal mode by following SOP’s in manufacturing.Opening of all transport mediums, extension of moratorium and new orders are important for survival.