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The slowdown in garment industry has to be addressed!

by Deepak Mohindra

16-April-2019  |  4 mins read

The more I talk to people, the more I am compelled to think deeply about the perception that the Indian garment manufacturing industry is shrinking in size. And the fact that the perception is not only internal but also global is thought-provoking.

We all accept that the alternate opportunities in the country in terms of ‘other’ lucrative businesses are many. Also, it is true that many garment manufacturers have already either added business options in other sectors to their portfolio, or in some cases, moved out completely from the garment manufacturing industry to embrace more profitable ventures.

I do agree that garment manufacturing has become a very complex and difficult business with results dependent on many internal and external variables that are hard to predict and pre-plan for.

But, my humble submission is that no business is easy… Earlier real estate was a golden business, and many exporters, mostly in the north of India, diverted their resources and interest to develop business in this area, but today with many political policies and mindset changes, the real estate market has come to a standstill with number of properties and crores of investment lying vacant with no takers at the rate asked for. Similarly, the mall and hospitality sector is slowly getting saturated and the margins that attracted new investment are shrinking. To put it simple, every business goes through its natural cyclic ups and downs and running away is not the solution. As for the garment manufacturing industry, it has taken years of hard work and perseverance for most of the companies to reach the level they are at although it is agreed that the situation is not very conducive as of now; but as the saying goes: It is time for the tough to get going!

It is the right moment for the industry to group together and find viable and sustainable solutions that will support not only survival but also growth… Unfortunately when my team talks to the industry, most of the time the tilt is towards survival and not growth. The industry has to realise that it is not only their business interest which is at stake, but the livelihood of so many workers who feed their families from this industry. For years, we have been fighting a battle to get due recognition for the industry as a priority sector, for the massive employment generation capacity that the industry has.

Sadly, though all Governments in principle agree to this reality, but no Government has been bold enough to make the policy changes in core areas, like labour laws and incentives to give the necessary impetus to the industry to take wings and face global competition head-on.

It is a now or never situation and I firmly believe that the opportunities for good manufacturing units are immense, more so as domestic market gets global recognition. The industry needs to hold on and talk facts – discuss rationally the changes it needs, present case studies and practically convince the Government that all national schemes for livelihood need to be connected to the garment industry for positive change and a win-win situation. Giving freebies is never productive. As we move into elections 2019, with little hope of any change that will enhance the business, can we at least expect changes that will stem the downfall of the industry?

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