The Hindu : Front Page : Recession brings Bangalore’s garment industry to a halt

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Monday, Dec 08, 2008
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Recession brings Bangalore’s garment industry to a halt

V. Sridhar

‘Only 75 per cent of the work force is being utilised

Bangalore: The recession in the industrialised world has brought Bangalore’s garment industry to a halt. Although the industry employs roughly as many people in the city as the Information Technology industry does, the plight of garment workers has drawn only a fraction of the media attention that IT workers have.

An industry source told The Hindu that although there were no layoffs, only 75 per cent of the work force was being utilised at any given time. “The remaining workers are laid off in batches but without a wage cut.” Of course, the workers lose the variable component of their pay, the portion that rewards their contribution to productivity gains, during the period they are laid off.

An exporter who mainly caters to the U.S. market, said: “Christmas season orders have fallen by about 8 to 12 per cent compared to last year.” The industry has to wait till March for things to be clearer, he added. “However, by and large, we expect the situation to worsen by then,” he said. Although there is a consensus that the garment industry is in a crisis, it is difficult to estimate its impact. Very little information about the industry in Bangalore is in the public domain. Asked how much Bangalore exports, a senior official in a quasi-government organisation connected to the industry, said, “That is a million dollar question.” A portion of the garments produced in Bangalore is exported through the Inland Container Depot (ICD) near Bangalore and some are air-freighted through the Bengaluru International Airport. A considerable portion of the exports is also routed through Chennai and Tuticorin, said the official. “Although exporters like to make tall claims about the quantum of exports from Bangalore, these figures cannot be trusted,” he said.

The industry, which is largely unorganised, consists of major exporters as well as vendors and fabricators who subcontract work for the larger players. This, industry sources say, makes it difficult to quantify the number of workers in the industry, although it is estimated that there are at least four lakh workers employed in about 400 units in the city and on its outskirts.

Invoking the usual mantra of “moving up the value chain” is of no use in these difficult times. An exporter whose turnover last year was nearly Rs. 100 crore, asks: “Where is the question of moving up the value chain when a piece of garment is to be sold at $2 or $3 a piece?” Even a price of $3 is considered a luxury, he points out.

The main importers, the large retail chain stores such as Walmart, are “smart”, says an exporter.

“They do the costing; they know the price of the raw materials we use and they know the cost of converting fabric to clothes, so there is very little room for us to add a mark-up,” he said.

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