As mentioned in our previous post, India is undergoing a severe second wave of COVID infections that has caught the nation off guard and appears more transmissible and deadly than any previous wave to date. As many states grapple with limited vaccines, medical supplies, facilities and personnel to combat this new triple mutant strain, the entire state of Karnataka & its capital Bangalore have gone into a complete lockdown starting Apr 27th until May 12th 2021. Although the Government Order grants exclusions to the manufacturing and construction industries, all garment factories have been ordered closed given the close proximity required by workers on the production floor.
This new government order is likely to deliver a devastating impact to an industry that is yet to recover from the first wave of COVID infections and lockdowns. Making matters worse, most of the workforce that the garment industry employs are low-wage earners, on average making $150 per month. Even temporarily foregoing these wages due to a lockdown will force most of these laborers to have to leave Bangalore (home to the vast majority of garment factories in the state) and journey back to their rural villages where typically they have family and the cost of living is more affordable. This could cause impacts to production capacity far beyond the immediate timeline of the lockdown.
Additionally, given the state of Karnataka contributes to nearly 20% of the nation’s garment exports and raw materials, the lockdown is also likely to further increase the price of cotton, which has shot up over 70% since the onset of the pandemic in April, 2020.
The Karnataka Employers Association (KEA) has appealed to the state government to make an exception and grant permits to allow garment factories to operate at 50% capacity. However, given the speed at which transmission and mortality appears to be increasing, it is highly unlikely the government will grant this request.
The following is a breakdown of COVID and lockdown status by state, gathered from SILQ teams stationed in major apparel production hubs.
- Complete lockdown is ongoing and is scheduled to expire on May 1st. However, there have been indications from the government that this government order is expected to be extending until May 15th. All citizens must remain home.
- Casualties and new cases appear to be beginning to trend downward.
- All factories remain closed with no operations, however, given the downward trend it is likely at this time that some operations will resume at the end of May.
- Garment factories operate largely with migrant laborers from neighbouring states like Bihar and Uttar Pradesh. If the lockdown is extended, workers may begin to leave and cause labor shortages upon reopening.
New Delhi (NCR Region)
- Complete lockdown is ongoing and scheduled through to May 5th. All citizens must remain home. All production is stopped.
- Caseloads and casualties continue to skyrocket. Oxygen supplies have run out in some areas or are down to a few hours of stock and the medical system is largely in chaos.
- It is highly unlikely manufacturing will resume any time prior to May 15th at this time.
West Bengal (Kolkata)
- With ongoing local elections expected to conclude this weekend, there has been large scale rallies and gatherings which is expected to accelerate the infection rate further.
- The state’s medical infrastructure is beefing up resources to tackle the onslaught and the state is on the verge of heading into a lockdown any day now.
- There is a complete lockdown of all garment facilities in the state which is expected to extend until May 12, 2021 which is subject to extension.
- All garment factories have closed, though a few have converted to manufacturing PPE and remain operational for that purpose.
- Case numbers are surging and the medical infrastructure is beginning to buckle under the strain with zero hospital or emergency beds available.
Tamil Nadu (Chennai & Tirupur)
- A weekday curfew is in effect beginning at 10PM and complete lockdowns are in place for weekends.
- All manufacturing continues to remain open.
- Garment factories are operating at ~80% capacity with the 20% reduction in output owing mostly to migrant labor returning home. Industry leaders and trade groups are making efforts to keep laborers in the state in order to minimize further outflow.
- With a new government slated to take over from the recent local elections that took place earlier in Apr, it is expected that the incoming government may issue new orders enforcing lockdowns or increasing the intensity of the existing curfews
- Compared to many states, Tamil Nadu’s caseload remains manageable for the medical infrastructure and new cases are not rising as rapidly as elsewhere. However, the caseload is expected to peak in mid-May and the situation on the ground is being closely monitored.