Producers of readymade garments, one of India’s top export sectors, have written to Prime Minister Narendra Modi, expressing their inability to pay wages since production has ground to a halt. They also sought the government’s support to cope with the situation.
“The government is requested (us) to pay the wages of workers engaged in the apparel exporting industry for April and May to bail out the sector, which is nearing collapse,” Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said in a letter to the PM on Monday.
AEPC clarified that garment manufacturers are not in a position to pay wages despite their best intentions as there is no production taking place and their revenue stream has dried up. All wages for March, however, have been cleared following the PM’s request, it added.
The government could pay wages from the funds available in the Atal Bimit Vyakti Kalyan Yojana (ABVKY) Scheme, which has an estimated reserve of about ₹91,000 crore, contributed by employees and employers, the Council proposed.
Sakthivel said the apparel exporting industry, which is the largest employer after agriculture, has been badly hit by Covid-19, as the principal export markets of the US and Europe are under lockdown for several weeks now.
“Buyers have not paid us for goods shipped months ago. On top of that they have cancelled/postponed deliveries of current orders. Overall, we estimate a loss of export of over $4 billion. Coupled with this, the lockdown in our country has also resulted in complete stoppage of work,” he said.
AEPC also asked the government to announce a substantial stimulus package for the industry as soon as possible.
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