Coronavirus (Covid-19) started from the “Wuhan” city of China at the end of 2019 and now spread out all over the world. Its impact has been felt across the globe in every government sector, Private sectors, Small and large scale businesses, and other areas too. Currently, not only India but worldwide is facing a severe lockdown. Similarly, we all know that the lockdown is a better option to save everyone’s lives but simultaneously lockdown put each life at standstill.
If we talk about the impact of COVID-19 on the Garment industry has almost reduced to halt. The garment industry is one of the largest industries in terms of economy, Import & Export, and employability. Due to the current scenario, the industry is facing the major hurdles in different areas like:
- Importation and Exportation of raw material: India is the second-largest textile exporter in the world with massive raw material. This industry is a significant contributor to the economy in terms of both the domestic market and exports. But the pandemic Covid-19 affected the majority of India’s export market causing order cancellations, this leading to inventory framing and expectation of slower comprehension of export receivables leading to a higher working capital constraint. Indian domestic market is also getting affected due to countrywide closure, with this domestic prices could be negatively wedged if exporters will scrapyard their inventories in the domestic market leading to condensed margins also. All these things could lead to short-term failures such as increasing unemployment of low wages labor and reduced consumption.
- Supply chain disturbance: Supply chain of material is disturbed because import and export are temporarily shut down due to worldwide closure. Therefore, the garment industry needs to look at local sourcing prospects.
- Workforce: The garment industry Provides a maximum number of employability but due to lockdown, all the industries are lead to a temporary shutdown. The low wages workers of this industry who are dependent on a daily basis salary are not getting meals properly. They are almost unemployed or lay-off and there is no surety of coming months that industry will rejoin the employees or not.
- Cash movement constraints: The garment sector contending with profitability issues due to shrill decline in the yarn exports, inexpensive imports, etc. And, if the industry will not get the same number of profit and it will definitely lead to cash movement constraints.
- Consumer emotions: If the situation will remain the same for a longer duration, then it will impact the consumer feeling on the higher side. Consumers have a desire to do shopping but they are forcefully packed at their homes for safety purposes. Due to this pandemic retail outlet will be affected for longer duration because as per the current scenario consumers will prefer to shop online. The extension of lockdown would directly increase the length of the recovery cycle.