Figure 6.3: Trend in RMG exports from India - 2019 vs. 2020

Section 3: Covid-19 And The Export-Oriented Garment Industry In India

1. How Did Covid-19 Affect India’s Garment Exports?

Indian garment exports have been declining over the last four years in terms of value of exports due to sluggish demand from the US and EU as well as rising competition from other garment exporting countries in Asia. This trend worsened in 2020 during the Covid-19 crisis as brands cancelled orders or demanded retroactive price reductions, for goods already in production or ready to be shipped.

Garment exports from India fell from 16.25 billion USD in 2019 to 12.26 billion USD in 2020, which is a reduction of around 24% (Figure 6.3). Most of this fall was experienced during the total lockdown phase with April reporting a decline in exports of almost 91%.

Exports from India had experienced a slight increase in February, 2020, as suppliers did not suffer from a raw material shortage, and orders from certain brands shifted from China to India. However, this advantage was soon lost with the imposition of the lockdown which also coincided with order cancellations by brands.

Exports picked up post-lockdown till September 2020, then dropped again till November due to lower consumer demand in Europe, when lockdowns were reintroduced with rising Covid-19 cases. Exports did not reach pre-Covid levels even in December 2020 and declined once again in mid-2021 due to the second wave of Covid-19 in India.

Figure 6.3: Trend in RMG exports from India - 2019 vs. 2020 Figure 6.1 : Trend in apparel exports from India - 2019 vs. 2020

SD) ts (Million U l Expor re T otal V alue of Appa

2000

1500

1000 2019 2020

500

0

March FebruaryJanuary April May June July DecemberNovemberOctoberSeptemberAugust

2. What Did The Indian Government Do For Garment Workers?

While the government eased liquidity for garment suppliers through tax incentives and by facilitating credit flow, there was no concerted intervention by the government to address the crisis of unpaid wages in the industry. The Government of India issued an advisory in March 2020 to all employers’ associations to not terminate their employees, particularly casual and contractual workers or cut wages of workers in view of the lockdown.6 However, it was not enforced as it was legally contested by employers who cited weak finances and limited monetary support from the government. Moreover, instead of safeguarding labour rights, the central government as well as several state governments also pushed through key labour reforms during the crisis,7 that further undermined workers’ basic rights and bargaining power to fight the Covid-19 induced wage theft in the garment industry.