Until 24 March, Ratnakala held a job at a garment factory, sewing children’s frocks destined for Europe, at a factory in Sarjapur, a textile hub in Bengaluru. Over the last few weeks, she’s been looking for work as a domestic help, after the factory supervisor said they were shutting operations for the duration of the lockdown.
“I’d prefer to work in the factory, but I’m not sure when it will open. I have two children. I need a job and it does not matter where," she said.
Nearly 500,000 people, mostly women, work in the garment factories near Bengaluru, including Bidadi, Chikkaballapur, Mysuru, Mandya and Ramangara.
Small enterprises near Bengaluru in Karnataka, and in Tirupur and Karur in Tamil Nadu are struggling to meet wages and running costs as payments worth crores are delayed by the global covid-19 outbreak.
Prathibha R., president, Garment and Textile Workers Union, Karnataka, said: “The workers have been promised salaries for March. These factories are 100% export-oriented and until business picks up in foreign countries, we won’t have fresh orders. The pending orders can be completed in a fortnight after the lockdown is lifted. After that, no one knows what we will do."
With the surge in covid-19 cases in Europe and the US, fresh orders seem unlikely even in June. “The biggest challenge is paying wages, which is almost 30% of our revenue. We want the government to cover wages for three weeks," said Harish Ahuja, managing director, Shahi Exports, which employs 100,000 people in 65 units in Karnataka. He said revenue is expected to fall 40% this year.
Tirupur, which is home to 10,000 garment units, is the country’s largest knitwear manufacturing hub. The town’s monthly turnover is ₹2,500 crore from exports, and the credit line they extend is 90 days. This means payments for orders sent out in December should have started coming in from March. “The immediate damages to the cluster are around ₹9,000 crore in terms of pending payments by buyers," said Raja M Shanmugham, President, Tiruppur Exporters’ Association. “Our payments are delayed because buyers, particularly in Europe and the US, have shut operations."
Across sectors, SMEs have been asking Union finance minister Nirmala Sitharaman for financial support for three months. Ashok Rao, Convenor, CII Karnataka MSME Panel, said: “We have to see how things unfold once lockdown lifts, which will throw up new challenges like pressure on the supply chain, restarting production and managing funds."
