Garment and clothing companies in India face a 30 per cent drop in their sales and profitability if the COVID-19 crisis continues. C losure of shopping spaces such as malls and high street stores, along with the general advisory to avoid public spaces, has crippled demand. Many other issues are likely to crop up if the current crisis continues. Mainly, there will be the problem of working capital shortage. The money flow will be inadequate for payment of taxes, discharge of bank interest, repayment of loans, statutory dues etc.

India can expect a 0.5 per cent hit on economic growth this fiscal if the Coronavirus pandemic lasts longer. The economic impact will be significant and long term if the virus continues for longer. Widening of the fiscal deficit is also feared. NPA levels in the banking sector are expected to increase. Exports and imports are likely to contract. While hospitality, tourism, aviation, auto and auto ancillary will be hit hard, pharma and healthcare will benefit from the pandemic. Indian garment manufacturers will need to look at other alternatives, including local sourcing, which in turn may increase the cost of finished goods by three per cent to five per cent. In addition to this, identifying vendors in such a short time can take a toll on lead times, quality and cost.