The way things stand, the current phase of India’s apparel export history—for that matter, anyone else’s too—starts with the beginning of the COVID-19 pandemic. It has been two years since the first major lockdown of late-March 2020 when life and businesses came to a standstill.
Payment issues and force majeure cancellations had then rocked the global textiles-apparel-fashion, and no manufacturing country was left untouched. As allegations and counter-allegations flew around, caught in the crossfire were hapless buying houses, left to tread a thin line.
The global textiles-apparel-fashion industry stands much sobered up now, and yes, the cancellations and payment delays are a thing of the past, says Venky Nagan, retired Chief Executive Officer of the Hong Kong-based Asmara Group. “Brands have had a serious review of their buying practices, reliable sources, shipping tie-ups and financing arrangements. Based on these, we have not seen or heard of bankruptcies, cancellations, postponements, or payment hiccups.”
Nagan says: “Some brands which had to take bankruptcy-protection surrendered the entire project to the nominated legal companies who administered the bankruptcy and explained to every vendor about the true situation and paid up whatever little money that could be salvaged. The decision to continue with the brand in its new avatar was left open to the vendor.”
The force majeure cancellations were the initial kneejerk reactions as the world was trying to get a grip on the pandemic, says Vishal Dhingra, President of Speciality Merchandising Services and Chairman of Buying and Sourcing Consultants. “No one knew what was happening and how to react. That’s a thing of the past now. The Western world, after initial hiccups, reacted maturely and kept the momentum going.”
Sanjeev Jain, President and CEO of Noida-based TQM Global Buying still remembers it well. “Consumer purchases were hit badly due to the global lockdowns and economic recession. The global consumptions were estimated to have shrunk by a huge margin. All economic activities except for the essential goods & services came to a standstill. Customers were forced to cancel orders and payments were held up. Factories suffered a lot of losses during that period. Somehow things have been opening back to normal now and those cancellations and payment things are certainly a thing of past now. Orders are flowing in, and the economy is trailing back on to the roads.
“Big brands and other western countries slowed down their buying pattern in the beginning, but slowly gathered momentum owing to the increased demands due to depleting inventories. As a buying/sourcing consultant, we have been balancing between factories and buyers to reduce the losses on either sides and also maintain a balance in keeping the business flowing in.”
MS Alam, President and CEO of Global Sourcing India, based out of Moradabad in Uttar Pradesh, cannot forget the last two years. The after-effects of the force majeure cancellations and payment issues still remain since “most customers have not still fully recovered. At times, we feel embarrassed in getting caught between customers and sellers. But, what could we have done at all? Even the suppliers knew that the clients did not have any money, but they would confide only in us.”
