Apparel industry may take a ~1-trillion hit

Industry body seeks wage subsidies from Centre

The country's apparel industry could take a hit of around ~1 trillion due to the lockdown and the slowdown in the economy later, says the Clothing Manufacturers Association of India (CMAI).

It has requested the government to consider both wage subsidies and working capital support. Around a fifth of its 1,500 members have indicated in a survey by the Association that they might have to close down, for lack of resources.

CMAI’S members employ around 400,000 people. The survey says there could be a drop in demand after the lockdown of at least 40 per cent.

Almost 80 per cent of the members who participated indicated they'd down-size immediately, with a minimum 30 per cent reduction in employees and a 20 per cent cut in pay.

Around 75 per cent expect normalcy in the market only in 2021-22. CMAI has sought a 50 per cent wage subsidy, up to ~5,000 a month for five months. And, for the provident fund and ESIC contribution of employees and employers to be done by the government for three months, for those getting no more than ~15,000. Also, for all banks to offer an interest subvention of five per cent on total borrowing , with 25 per cent additional working capital to be made available.

Also, that markets regulator Sebi relax the rules on capital raising for listed companies and a 90-day moratorium on listed

debt instruments which are used for financing working capital and term loans. Plus, 90 more days for depositing goods and services tax dues for March and 30 days for the months of May and June.