Union Budget's Impact On Indian Garment And Apparel Industry

One of the hardest hit sectors during the pandemic was the Indian Garment and Apparel Industry. To offset losses in the MSME sector, the government has introduced some key offerings that may become a game-changer. Samir Alam analyses…

- Samir Alam

The Indian Garment and Apparel Industry was one of the hardest hit by the coronavirus pandemic in 2020. Stringent lockdowns, job losses, disruptions in the raw material supply chain, and plummeting demand across national and international markets had crippled it. The global retail industry is dependent on the low-cost, labor-intensive textiles producing countries like India. Setbacks in India, not only pose a threat to domestic economy but have also crippled parts of the global trade as well.

To offset losses, many in India wanted the central government to initiate concrete steps in the Budget 2021-22. According to the CMAI (the Clothing Manufacturers Association of India), 80 per cent of all garment manufacturers want more financial support from the Indian government in 2021. The pandemic and its on-and-off lockdown effects had crushed the finances of manufacturers, and a serious capital push could only help their recovery.

Since most manufacturers fall in the micro, small, and medium enterprise (MSME) sector, sharp falls in production prevent paying up wages on time or sustaining production processes. Garment manufacturers wanted to bring back jobs to their industry which is the largest employer after agriculture. Producers also want incentives for production, at least for a year, to help reenergise the sagging fortunes of the industry.