Garment manufacturers in India are requesting government help to cover workers’ salaries amid the deepening COVID-19 crisis.
Following supply-chain disruptions due to the coronavirus pandemic, factories are “not in a position” to pay wages for April and May, the Garments Exporters and Manufacturers Association (GEMA) said last week.
“We humbly wish to inform that we are not in a position to pay wages for the months of April and May despite our best intention,” GEMA president Vijay Jindal wrote in an open letter to Prime Minister Narendra Modi and state chief ministers.
Most export orders, Jindal said, have either been frozen or canceled outright, and even ready-to-ship items are in a state of limbo.
Finished garments, he added, litter factory floors because of the nation-wide lockdown, which the government imposed last month to stem the spread of the contagion in a country of 1.3 billion. The strict social-distancing measures have largely worked: To date, India has nearly 30,000 confirmed cases and 900 reported deaths. U.S. cases, by contrast, soared past 1 million on Tuesday, per Johns Hopkins University data.
Still, the inability to dispatch product because of sealed borders and suspended transportation has resulted in severe hardship for GEMA members whose squeezed margins leave little room for maneuvering. And buyers, as always, have the upper hand.
“The situation has become grave as they have yet not got any receipt of payment from the buyers,” Jindal said.
GEMA wants tap into funds from the Atal Bimit Vyakti Kalyan Yojana welfare scheme, which provides cash to insured persons who have lost their jobs and has, “as understood, huge reserves.”
Employee state insurance and labor funds can also be used to pay employers covered under those programs, he said.
“The industry is collapsing and looking for the much-needed ray of hope and support to survive and sustain,” Jindal said. “We request the government to come forward and stand by the apparel export industry to pay wages for workers for the months of April and May.”
India’s garment sector employs more than 12 million people in factories, though millions more—mostly women and girls from marginalized communities —work in informal, home-based settings, according to a 2019 study from University of California, Berkeley.
The United States and the European Union receive nearly half (47 percent) of the country’s total apparel exports, which surpassed $16 billion in 2019.