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Fashion Workers Left Destitute in India

By cancelling orders with Indian suppliers during the country’s chaotic lockdown, global brands are making impoverished workers even more vulnerable in a market where 60 million people depend on the fashion industry for their livelihood.
Migrant workers from the state of Madhya Pradesh carrying their belongings wait to board a bus | Source: Getty Images
By
  • Phyllida Jay

DELHI, India — For the poorest workers in India's globally connected fashion industry, the impacts of Covid-19 are catastrophic. Here and in many parts of the developing world — where factory workers live a hand-to-mouth existence at the best of times — social distancing and self-isolation are an unattainable luxury. For many, the threat of a potentially deadly virus pales in comparison to far more tangible and immediate concerns like unemployment, eviction and starvation.

The Indian fashion industry is vast, encompassing domestic retail brands, export production for international fast fashion players such as Zara, Primark, Gap and H&M, textile manufacturing, luxury embroidery exporters, a sprawling handloom industry and one of the world's largest denim manufacturing hubs. According to The India Brand Equity Foundation (a Ministry of Commerce initiative) some 60 million workers in India are dependent upon the textile and clothing industry for their livelihood.

“For the most poorly paid workers, with an average monthly salary of about 8000 rupees ($105), life has always been difficult,” says Gopinath K. Parakuni, general secretary of Cividep India, a Bangalore-based NGO that educates workers about their rights.

“Government support for subsistence is meagre. Almost all of them are in debt to local money lenders. Unemployment means destitution. They will fail to pay the rent for their houses and would be evicted sooner than later. They will not be able to buy food.”

The majority of the brands are refusing payment for completed orders.

While there are signs that the government might partially relax the country's strict lockdown from May 3rd, it is unclear to what extent and there is a possibility that current restrictions may be extended. Meanwhile, the impact of Covid-19 continues to bite the Indian economy, and advocates of garment workers there warn that the situation will get even more grim.

"Orders are being cancelled. The majority of the brands are refusing payment for completed orders even — without regard for the supply chains that they own and drive," says Anannya Bhattacharjee, president of Garment and Allied Workers in the northern state of Haryana, one of the largest production hubs in India, and international coordinator of the Asia Floor Wage Alliance.

“We see early gaps between government worker welfare policies and the industry’s ability to deliver on them due to the aggressive abdication of responsibility on the part of global brands,” Bhattacharjee adds.

In addition to its enormous domestic fashion market, India is the fifth largest apparel exporter globally, with exports of more than $8 billion of apparel annually according to the World Trade Organisation. But now, “due to the loss of retail sales internationally we have seen [apparel] export orders cancelled to the tune of 75-80 percent currently," Federation of Indian Export Organisations President Sharad Kumar Saraf estimates.

Meanwhile, manufacturers like Punit Lalbhai are feeling perturbed by the way some international partners are behaving in the increasingly uncertain market environment.

“The most challenging aspect of it is that the demand is impacted across the globe all at once. A lot of our customers have either deferred, held back or cancelled orders,” says Lalbhai, executive director of Arvind Limited, the $1.7 billion conglomerate whose operations include a vast retail network across India. Arvind is one of the world’s largest denim manufacturers, producing over 100 million metres of fabrics and 6 million pairs of jeans annually for its domestic labels, as well as international brands like Levis and Gap.

“Over the next 6 to 8 months we do not expect to run more than 50 percent capacity, though it is too early to tell if even that much will be possible,” he adds.

Different Impacts but a Shared Pain

Although apparel production is spread throughout India, regional differences determine how the fallout from Covid-19 will impact workers.

According to a 2019 report by The Center for Global Workers' Rights, Delhi’s National Capital Region, satellite cities of Gurgaon, Noida and Faridabad make up the second-largest area for apparel exports and are home to thousands of small garment factories with largely regional migrant male workers. Bengaluru and Tamil Nadu’s garment factories are characterised by a largely female workforce.

Bengaluru has the third-largest concentration of apparel export production. Thanks in part to the export hub of Tiruppur, Tamil Nadu is the largest apparel exporter of knitwear in India with over 10,000 manufacturing units producing almost $4 billion worth of exports annually, 36 percent of which go to Europe and 34 percent to the US. The workforce is young, up to 90 percent female and low caste.

A report published on April 10 by Asia Floor Wage Alliance highlighted that while the Indian government has “issued directives to pay compensation to workers in the case of factory closures, this is mostly applicable to regular workers.”

Professor Mark Anner, director of The Center for Global Workers' Rights, notes this fact is pertinent since in the fashion and textile industry it is women who are most often employed as informal, short term or piece rate workers.

Women workers would be forced to grant sexual favours for small desperate resources.

“They are the most vulnerable segment of supply chains. They earn less income than men, and often are in debt. Many do not have formal contracts and are paid in cash. How will they survive? Who will pay? And how will they be paid?" he asks.

One thing is certain, without permanent employment contracts, they won’t be covered by government labour directives, says Bhattacharjee.

“Women workers dominate in the garment industry workforce and even under normal circumstances, face daily gender-based violence and harassment at the workplace. This crisis will absolutely exacerbate their already stressful lives. Women workers would be forced to grant sexual favours for small desperate resources, find ways to feed themselves and their families, take care of their health and survival along with their dependents without support from workplace or state.”

The textile industry, which supplies much of the garment manufacturing sector, is the second-largest employer after agriculture in India, according to The Ministry of Commerce, and a vital part of rural livelihoods.

"Many weavers practice agriculture part-time in the villages and would have been busy during the just-concluded harvest season. They would have devoted the months of March onwards to weaving full-time. Any loss of income from weaving is a body blow to the entire rural community," says Radharaman Kothandaraman, the founder and chief executive of House of Angadi, which counts three lavish boutiques in Bengaluru, stocking saris and contemporary Indian ready-to-wear, and employs 2,500 handloom weavers who on average weave one million yards of textiles for luxurious saris for the domestic market, as well as international brands including Ralph Lauren, Donna Karan and Armani.

Kothandaraman’s company has paid the weavers advance wages for the next month and a half, and intends to continue with this until the lockdown is lifted.

“Our international business is affected badly by almost 70 percent since the whole world is in lockdown mode. In the past whenever there was a global crisis we could depend on the domestic business as an alternative, but when all stores are shut and there is no consumption of non-essentials there is no respite,” he adds.

According to Manjula Tiwari, chief executive of Cover Story, a brand that aims to be India’s answer to Zara, companies like hers that expanded rapidly over the past few years across India are now on the frontline.

“The industry is in discussion with the government for support in these unprecedented times as without this we may see business closures, job losses and impact on vendors and suppliers on a very large scale,” Tiwari says.

In India, where a longstanding post-independence legacy of socialist isolationism is deeply embedded in the consumer psyche, a return to austerity and caution are likely to impact consumer spending patterns beyond the immediate crisis.

Lockdown and the Long Journey Home

The much-criticised lockdown that was announced on March 23rd by India’s Prime Minister Narendra Modi compounded the financial instability of millions of workers and the poor who are estimated to form 60 percent of India’s population of 1.3 billion. India’s citizens were given just four hours' notice to ensure they had enough food, medicine and other essential supplies in sufficient quantities for a curfew to last 21 days (which has since been extended). Now, some city dwellers report police checkpoints every few blocks and strict implementation of the ban on movement.

This has only added to the grim reality for those who are always just a pay cheque away from destitution. As investigative journalist Rana Ayyub emphasised in a recent podcast with BoF Editor-in-Chief Imran Amed, for India's poorest, who largely rely upon the informal sector and daily wage labour to survive, the lockdown has proved to be catastrophic.

They face the additional hardship of not knowing whether to stay or return to home villages.

According to Cividep, some 400,000 workers, almost three fourths of the apparel industry workforce in Bengaluru (80 percent of whom are women) including migrants from rural Karnataka and neighbouring states like Tamil Nadu, have returned to their homes as a result of the slowdown in production.

In Delhi, the picture of displacement is similar, with an exodus of impoverished migrants who form the backbone of functioning daily life in the national capital. In addition, many artisans and garment industry workers such as tailors are Muslims, who form a large minority within India's Hindu-dominated population. Muslims were targeted during the most recent wave of communal violence that erupted in Delhi during US President Donald Trump's visit in late February. Now just four months into 2020, they are experiencing a second wave of dislocation and trauma.

Bhattacharjee says that “they face the additional hardship of not knowing where to be — stay in the destination hoping for re-employment although they cannot pay rent or groceries; or return to home villages and districts and face unemployment and hunger which made them leave in the first place."

Left high and dry, many unpaid apparel and textile industry workers in North India have also been forced to do exactly the opposite of self-isolation, and in a mass exodus, scenes of which were eerily reminiscent of the 1947 Partition, headed for family homes far away from the urban metros to which they migrated in search of work. Walking hundreds of miles some have died, many have been beaten by police and thousands have found only fear and stigma when returning to villages in rural areas with scant healthcare resources and communities fearful of contagion.

Ayyub warns that, at a time when India is already reeling from economic slowdown and communal tensions, the pandemic is exposing the deep structural divide between rich and poor in the country more than ever before.

The Way Forward

In neighbouring Bangladesh, a survey published on March 27th by The Center for Global Workers' Rights reported that millions of workers had been sent home without pay. It revealed that nearly all Western buyers refused to contribute to worker wages. Less than a week after its publication, a handful of brands including H&M, Inditex and Target committed to paying for completed orders or ones currently in production. However, other buyers made no such promises.

The evidence from India suggests a similar pattern with some brands resorting to “force majeure” clauses in their contracts (typically only used in case of natural disasters or war) in order to justify not paying manufacturers. This has dire consequences for workers where social security and government welfare are inadequate at the best of times.

The pandemic illustrates the dramatic power imbalances in buyer-supplier relationships

Asked whether H&M’s commitment to Bangladesh will be replicated in India, a spokesperson for H&M responded:

“To help suppliers in this difficult situation and minimise the negative impacts of lockdowns, we have taken the decision not to use our contractual right to immediately cancel delayed orders, but instead have an open dialogue with each affected supplier to see if we can come up with a solution. As a last resort, and only for orders that are seasonal, such as shorts, and delayed for more than one month, we will potentially need to cancel. If this happens, we will [be] in a close dialogue with the supplier [to] work out how we can support, for example placing new orders that are not seasonal."

Professor Anner is emphatic about the need for the fashion industry to see this as an opportunity to right some longstanding injustices in its supply chain.

“The pandemic illustrates the dramatic power imbalances in buyer-supplier relationships. After decades of corporate social responsibility pledges we see some major brands, such as C&A and Primark, abruptly terminating their relationships with suppliers and not taking full responsibility for all their liabilities. Others, such as H&M, are taking responsibility. They set an example that all buyers should follow,” says Anner.

C&A did not respond to email requests to comment for this article. Other brands have responded to public outcry and activist pressure by committing to pay. In an emailed response to The Business of Fashion, Primark shared documents from April stating its intention to honour all pending orders with its suppliers in India.

However, Christie Miedema sounds a note of warning. "An important caveat here is that we will first have to see whether brands that committed are actually paying up,” advises the campaign and outreach coordinator for the Clean Clothes Campaign.

Without serious public and private intervention, Lalbhai believes that the impacts of the pandemic will take a long time to be reversed.

“Governments, banks, brands, and supply chain players will have to spread the pain across for the industry to survive this crisis. Even with that happening I see many players going out of business, and the next year is likely going the be the most painful that the industry has ever seen.”

The question going forward is what lessons have been learned from all of this. Going back to business as usual will not work.

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