6. India

INDIA

Chapter Highlights

• 89% of the workers experienced employment shocks at some point during 2020, either in the form of layoffs or terminations. • Workers reported an overall wage theft of 23% in 2020, with a sharp decline in wages by 73% during the Covid-19 lockdown period. • During the Covid-19 lockdown in April and May, 2020, total consumption reduced by 16%, with debt financing 81% of the total household consumption.

• The average size of debt for garment workers increased more than two-fold in 2020, from 152 USD in the pre-pandemic period to 360 USD by December, 2020.

• 93% of the workers were pushed below the international poverty line of the

World Bank (measured at 3.2 USD PPP) in April and May, 2020.

Section 1: Introduction

The arbitrary lockdown imposed by the Government of India in March 2020 that completely halted production activities overnight emerged as one of the key drivers of distress faced by millions of garment workers in India. The lockdown-induced distress became a humanitarian crisis due to the large-scale order cancellations and retroactive price reductions by brands for goods that were already in production or completed and ready to be shipped.

The textile and garment industry, which is the second largest employment generator in India after agriculture, directly employs 45 million people and 60 million in allied industries and earns around 40 billion USD as foreign exchange.1 The industry accounts for 5% of the global market share, with India being ranked as the 5th largest global exporter of Ready-made Garments (RMG)2 .

During the Covid-19 crisis in 2020, most suppliers suffered a decline in revenue due to total or partial cancellations of orders and demands for discounts by global brands, which led to a piling up of unsold inventory and a shortage of working capital.3 Though some suppliers diversified by producing Personal Protective Equipment (PPE) and focused on opportunities in the domestic market, these were not sustainable business solutions. Suppliers who were operating on wafer-thin margins thus resorted to wage theft to stay solvent.

Without wages from employers and with limited assistance from the government, garment workers and their families were pushed to extreme crisis. During the Covid-19 lockdown, most garment workers were laid off or suspended without paid leave or social security benefits, pushing thousands of workers into hunger and poverty. Most workers reported that they were unable to secure adequate food or pay rent in April and May, 2020 and were forced to borrow from local moneylenders at usurious rates of interest.4 In cases where employers provided food, shelter and salary during the lockdown,