Export centers face labor shortage, as migrants stay away

By Nayan Dave & Banikinkar Pattanayak

Companies in Tirupur, India’s largest garment hub, only operate with around 60% of their usual workforce. In Surat, home to some 6,000 diamond-cutting units, around 4,000,000 migrant workers and artisans, or 40% of the industry’s workforce, have not yet returned to work since Holi.

Fabric production in Surat, also a textile hub, has collapsed by a quarter to three crore meters per day. Leather units in Chennai face a drop in workforce participation of up to 20%.

The export hubs of major labor-intensive industries, which are already struggling to cope with a cash shortage, face a labor shortage as most migrant workers stay away just as orders from crucial Western markets begin to pour in.

The shortage – in the order of 20 to 40% of the usual workforce – threatens to derail recent growth momentum and hamper the ability of exporters to meet their supply commitments on time in a context of rapid depletion of stocks.

Exporters of textiles, clothing, leather products, gemstones and jewelry from hubs, such as Tirupur, Chennai, Mumbai and Surat, to whom FE spoke, said they fear a possible third wave of Covid and the consecutive lockdowns in states have kept most migrant workers at bay and even discouraged some foreign buyers from entering into new contracts.

In some cases (mostly in clothing), buyers in the US and EU are insisting that Indian suppliers make a firm commitment to deliver on time, well before the crucial Christmas season, exporters said. Not surprisingly, MSMEs are hit harder than larger entities.

The Tirupur clothing cluster – with around 1,000 units, mostly MSMEs – employs around 6,000,000 people. About half of them are migrant workers. Even many local workers were only able to join work recently, as public transport was not allowed during state-imposed closures to contain the second wave.

Raja M Shanmugham, chief executive of Warshaw International and president of the Tirupur Exporters Association, suggested that states be cautious when imposing restrictions and that there should be predictability in policy prescriptions. Large-scale vaccinations need to be undertaken in key industrial areas and credit flows to MSMEs need to be greatly enhanced, he said.

The standards of the Emergency Credit Lines Guarantee Program (ECLGS), especially on additional 10% loans, should be relaxed to facilitate the provision of larger loans to units that do not wish to opt for an overhaul of the loan. ready, said Shanmugham.

Of course, labor participation is improving with the relaxation of localized lockdown restrictions, but it is still far from normal levels, exporters said. This will prevent exporters, at least temporarily, from taking full advantage of the rebound in demand in key export markets.

Importantly, after rising sharply in April and May, growth in the country’s apparel and leather product shipments slowed in June and remained well below a 48% jump in overall merchandise exports. While apparel exports rose 25% in June, those of leather products rose 33%. However, gemstone and jewelry exports rose 81% in June, but they were driven by a massive base effect.

Dinesh Navadiya, chairman of the Gemstone and Jewelry Export Promotion Council (Gujarat region), said the absence of nearly 4,000,000 artisans and migrant workers in the Surat diamond hub has weighed down production up to 20% in all units. Many of the hub’s exporters are struggling to deliver on time, he added. About 90% of the world’s rough diamonds are cut and polished in Surat. The city’s 6,000 diamond cutting and polishing units employ approximately one million people.

Likewise, loom weavers in Surat are forced to work as one shift due to low worker participation. “We are experiencing a labor shortage of 30 to 35%. Weaving is a labor intensive industry, ”said Mayur Golwala, president of Sachin Industrial Estate, which houses hundreds of weaving units near Surat.

Golwala, also secretary of the Federation of Gujarat Weavers Associations, said the labor shortage had lowered fabric production to just over three crore meters, from around 4 crore meters of fabric per day. .

Almost two million people work in different segments of the textile industry in Surat, which includes composite factories, spinning and weaving units, processing plants and around 400 textile markets. Each segment of the textile value chain in Surat is lacking in manpower, Golwala pointed out.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

*