After agriculture, the textile sector has historically been the only sector of India to produce significant employment for both skilled and unskilled labour in the country.
As the world’s top cotton grower India produced an estimated 362,18 lakh bales during the 2021-2022 cotton season. The textile industry in the country contributes significantly to the Indian economy by directly employing an estimated 35 million people. But in the end, the entire sector accounts for 35 per cent of gross export revenue that makes just 4 per cent of the GDP.
The textile industry can be divided into two segments-
- The unorganised sector is small-scale and uses traditional tools and methods. It consists of handloom, handicrafts and sericulture (production of silk)
- The organised sector uses modern machinery and techniques andconsists of the spinning, apparel, and garments segment owned by some of the biggest firms
From January 2022, the GST rate on fabrics has increased from 5 to 12 per cent while the rate on the clothing of any value will increase from the previous 5 per cent tax on items costing up to INR 1,000 to 12 per cent .
Additionally, the tax rate on textiles (which includes synthetic yarn, woven fabrics, blankets, pile fabrics, tents, accessories like serviettes or tablecloths, tapestries, and rugs) has increased from 5 to 12 per cent.
But in the wake of COVID-19 pandemic, the industry has, of late, been among the hardest hit. While many established players in this industry incurred significant financial losses, the pandemic especially made the lives of new players and skilled and unskilled labourers particularly miserable.
One of the new players in the field is BeYours. Its creators, Ashish Behati and Nilesh Karnani, spoke to The Statesman about the difficulties they encountered during the pandemic.
Ashish Behati recounted how they were able to manage the business during the pandemic, especially after the announcement of the lock-down when prices of yarns increased sharply. Placement of sizable purchase orders was a challenge in the wake of rates changing on a day-to-day basis. There was a slump in sales, and money flow from market’s market started dwindling before coming to an abrupt halt.
“Transportation completely stopped. Everything that sustained our production came to an abrupt halt. We had kept a good amount of merchandise on hand. During COVID, we were also selling things, but only through an online payment system since COD was shut down for safety reasons,” he said.
Since there was no one to take care of them during the epidemic and a few individuals stepped in to bail them out of their financial crisis, the industry suffered from problems on both the demand and supply sides that directly affected the lives of those involved with this sector. A bulk of labourers fell into a terrible situation where it was considerably more difficult for them to support their families.
The weak foundation of the sector when it came to weathering the storm of COVID- 19 further complicated the overall impact on this already beleaguered sector.
Two years have passed since the pandemic has been overcome. But the East Delhi industry units that comprise Gandhi Nagar, Ajith Nagar, Seelampur and Jafrabad are still dealing with post pandemic issues such as a lack of technology upgradation, inefficient infrastructure, fragmented industry structure, and lack of manpower.
The cluster textile industry of East Delhi is the prime example where both owners and workers are still in a state of the financial crisis, which according to them could take a few more years to recover.
Sahil Malik, the owner of Gandhi Nagar-based Auk Urban, a customisation clothing brand, recalled the difficult times of the pandemic when many skilled labourers left Delhi’s textile hubs due to a lack of government support and never returned. This created a vacuum of skilled workers in this East Delhi clothing industry.
He added that after the pandemic, many owners of the mills, including himself, had to sell off their expensive machinery as there was little demand for them at all stages of the supply chain – from the manufacturer to the wholesaler to the retailer to the buyer – and now that the pandemic has been contained for so many months, it appears that business is gradually picking up again.
On a larger scale, the industry employed more than 105 million people in India, both directly and indirectly, but the current difficulties have caused owners, labourers, and workers to have to have a second thought on looking for new employment avenues and leaving the sector for good in the hope of resolving their financial issues caused by those 2.5 years will someday be resolved.
Nilesh Karnani, founder of BeYours, is, however, optimistic about things improving in the future, as are owners of many other small firms like him.
“Every startup endeavours to solve the problem they encounter on a day-to-day basis as they did after entering the fast-changing dynamic fashion industry. This is the reason despite the pandemic, we continued to work. Our crew was collaborating remotely on fresh concepts and new collections during the pandemic. At the time, we were developing new products, better support, and marketing strategies.” he added.