Garment Industry B2B Blog

Coronavirus Pandemic downturn strikes solid on
Indian Garment Industry

According to the latest report, the impact of the coronavirus pandemic on our Country’s Domestic Garment Industry (Manufacturers, Wholesalers, Retailers) has turned out unparallel. And, plunging sales, shutting down of factories, lower wages, etc… have added on to the problems.

The Indian Domestic Garment Industry in India are once again faced with a huge challenge caused by the current wave-2 of COVID-19, with 77 per cent of the manufacturers surveyed contemplating reducing their staff by more than 25 per cent.

The Domestic Garment Industry, which went through a torrid last year, was just about recovering at the beginning of 2021, reaching close to 80 per cent of its pre-COVID sales levels.

On the other hand, the CMAI Study, conducted at the beginning of May ’21, indicates 55 per cent of the Manufacturers, Wholesalers, and Retailers achieving less than 25 per cent of their sales during April 2021.


is looming large for these Manufacturers, Wholesalers, and Retailers as 72 per cent of the respondents have seen more than 50 percent of their orders on hand being cancelled by their buyers. This will lead to a huge problem of dead inventory in the coming months.

“The situation is equally grim on the cash flow front, with 72 percent of the respondents receiving less than 25 per cent of their due payments in April, and another 12 per cent receiving less than 50 per cent of their dues,” it added.

What makes the situation more worrying is that as a result of regional lockdowns increasing across the country, 90 percent of the members believe May to be far worse than April, and 45 percent not expecting markets to revive before Diwali festival-2021. In fact, more than 20 percent do not see the revival starting before 2022.

Whilst fully supporting the various State Governments in their measures to control the pandemic, industry agency has urged the governments, in particular the governments of Kerala, Delhi, Maharashtra, and Karnataka – two of the largest clusters of garment manufacturing in the country – to give due consideration to the domestic garment industry as and when they contemplate the opening up of economic activity. CMAI has urged the government to permit garment factories to operate with 50 percent of their capacity with immediate effect, whilst strictly following COVID protocols.

Indian Domestic Garment

(Manufacturers, Wholesalers, Retailers) industry is staring at huge losses due to the COVID lockdown. The analyst community expects garment companies’ sales to go down anywhere between 50 percent and 60 percent in the first quarter of the financial year 2020-21. “A key issue for the garment sector is that a large part of the Spring-Summer Collection has already arrived for most players. Inventory levels are high, but footfalls have dropped significantly. In certain cases, the drop is as high as 80-100 percent.

In fact, most garment brands have stopped orders of the Fall-Winter Collection as they know that they would end up with excess inventory from the previous collection. “We were expecting 50 percent sales in April-May and we were expecting it to spike from thereon. I don’t expect more than 10 percent sales in April. We have kept put all inventories on hold now. We do have sale inventory from the earlier collection which we will keep for next year,” says Lalit Agrawal, MD of value fashion brand, V-Mart.

Kavi Mishra, the Managing Director, and CEO of House Of Anita Dongre says that his company has cut down on fall-winter collection production. “We will spread our spring-summer collection over the next few months, as that will help us protect cash flows.”

Preeta Sukhtankar, Founder, Label Life, says that her brand is doing whatever it could to bring in positivity at a time when the mood is somber due to the outbreak of the deadly COVID-19. Sukhtankar of Label Life says that the saving grace for her brand is the strategy of launching a new collection every month. “We thankfully don’t have too much inventory as we follow a practice of launching a new collection every month. Our April collection hasn’t come yet. However, this month, I am not sure when our products will reach the consumer,” she says, referring to the COVID-19 lockdown, due to which brands are unable to do online deliveries.

Mishra of House Of Anita Dongre, says that the biggest lesson from COVID-19 for Garment brands like his has been to move to a more flexible supply chain model. “We usually plan our collection for a period of six months, we now need to plan a new collection every two months and have at least 6-7 collections a year. That’s how we can manage our inventory more efficiently.”

Garment brands, says Mr. Rishav Jain of Alvarez & Marsal, are trying all possible ways of generating funds. “Retailers and brands are trying to manage vendor payments cycles, discussing delay in rental payouts with landlords, trying to stop all kinds of frill expenses. Most players are also trying to use this opportunity to rationalize their underperforming stores as well.”

Both Agrawal of V-Mart and Misra of House Of Anita Dongre, have confirmed that all their store openings in the coming months have been halted. While the 300-store strong House Of Anita Dongre was planning 10 percent increase in its store count, V-Mart was planning to open as many as eight stores in the next two months.

While most of the leading Garment brands have promised to pay their store staff for the next 40 days, if the COVID-19 lockdown extends beyond that, they are not sure if they will be able to protect their salaries.

The ladies garment as well as female garment, ladys garment  & kids wear, children wear, boys wear, girls wear, ethnic wear, and last but not the least men’s wear .

The full recovery for Indian apparel

– players is likely to be delayed to 2022-23 due to the resurgence of the COVID-19 pandemic cases, according to a report. ICRA Ratings expects the full recovery for Indian domestic garment (manufacturers / Wholesalers & Retailers) players to be prolonged and pushed back to the financial year 2023 amid rising COVID cases in India and some of the key markets.

Their business performance in the financial year 2022, however, is expected to be better than the financial year 2021, supported by continued favorable progress on the vaccination roll-out and a material shift witnessed towards online shopping, according to the ICRA report.

This will cushion the adverse impact on the brick-and-mortar outlets, helping companies report a better performance compared to last year, the report noted. Top of Form

The Government of India has initiated various policies to support the textile and apparel sector’s growth for the long-term prospect With the allowance of 100% FDI in the sector under the automatic route it is expected to attract USD 140 billion (INR 10,485 billion) foreign investments in the coming years and also carried out high investments under various scheme’s like Integrated Textile Parks (SITP) and Technology Upgradation Fund Scheme (TUFS) to encourage the flow of more private equity and to train the workforce.

To further accelerating the growth in the textile industry, the Textile Ministry assigned INR 6,900 Million (USD 106.58 million) for the set-up of 21 readymade garment manufacturing units in seven states for the development and modernization of the Indian Textile Sector. India has also become the second-largest manufacturer of PPE in the world with more than 600 companies in India certified to produce PPE’s today whose global market worth is predicted to be over USD 92.5 billion (INR 6,927 billion) by the end of 2025, as compared to USD 52.7 billion (INR 3,971 billion) in 2019 which would further enhance the textile products demand in coming years. Being largely a consumer-driven industry, the textile and apparel sector’s growth and performance is majorly dependent on India’s growing economy. 

The ladies garment as well as female garment, ladys garment  & kids wear, children wear, boys wear, girls wear, ethnic wear, and last but not the least men’s wear .

The growth in the textile and apparel sector is sustained by the strong domestic consumption as well as export demand over the medium term. India has a high abundance of raw material, particularly with respect to cotton where it is quite cost-competitive, together with healthy infrastructure and skilled labor force as compared to neighboring countries like Bangladesh and Sri Lanka, which is expected to provide support in expanding the country’s share in the global textile and apparel market. Though short-term hiccup due to the ongoing Coronavirus pandemic will result into contraction and lower growth and market value for the next couple of quarters as compared to the historical average, it is still estimated that India has the potential to reach USD 70 billion (INR 5,242 billion) in exports and achieve a much higher share of the global market by 2024.