The Indian experience in fighting the spread of novel coronavirus disease (COVID-19) has developed a great understanding of the pandemic’s profound impact on around a billion people. With various measures in place to contain the spread of the virus, the time has now come to focus on getting the wheels of our economy rolling. 

The process so far has not been smooth given the staggered opening and the instinct to "go home" that has gripped the migrant labour force due to the extended lockdown and the ensuing economic hardships.  Even the "in-house" labour force wants to return home at the first sign of normalcy, before committing to return to work.

As regards the COVID VIRUS, the challenge before the State & District Authorities is to guard against any community spread and move to flattening the curve, as quickly as possible.
  In the case of the Lockdown, a clearly defined roadmap moving swiftly away from the system of "passes and permissions" can help us plan our return to normalcy. 

The industry on it's part would have to ensure a pandemic resilient manufacturing environment with functional exchange of people and goods. This process will help us to quickly realign ourselves with the global and domestic economies.

Economic Recession?

The novel coronavirus disease is holding the world in a vice-like grip. It is uncertain and hard to predict whether the containment measures will be effective or not. If international borders continue to be closed for too long, the situation will become catastrophic for many countries in the world.

As the RBI Governor pointed out in his statement issued on 22nd May, the global economy is heading inexorably into recession.

Among advanced economies (AEs) that have released GDP readings for Q1: 2020, contractions were in the range of 3.4 per cent to 14.2 per cent (q-o-q, annualised); for emerging market economies (EMEs), the growth rate ranged between 2.9 per cent and (-) 6.8 per cent (year on year basis).

According to the United Nations Conference on Trade and Development (UNCTAD), the value of global trade contracted by 3.0 per cent in Q1:2020. The volume of world trade can shrink by 13-32 per cent in 2020, as projected by the World Trade Organisation (WTO).

The deteriorating global economic conditions, including foreign and fiscal exchange constraints, have already effected supply chains and consumption of goods and services.

Resuming Supplies

While many of our firms continue their efforts to build resilience into the supply chains, the prevailing trading patterns need to be reviewed. Efforts should be made to accelerate the trading engagements with local, regional distribution channels rather than only the global supply chain networks. In addition, strategic use of inventory locations should also be planned.

The Government on it's part needs to rethink existing bilateral and multilateral treaties and look at strengthening bilateral trade relationships, especially with the countries that are less impacted by the global pandemic.

Support for revival

Considering the scale of the impact on businesses, the economy and trade, the Government has been announcing relief measures which are a mix of credit guarantees, liquidity infusions into Banks and other financial institutions rather than the economy per se.

A package of relief measures for SME'S has also been announced including changes in the definition. Apart from investment, the criteria of turnover has also included in the definition.

Video Conference with Hon’ble Minister of TEXTILES

In order discuss various matters in terms of providing economic relief to the textile sector, the Council organised a Video Conference with the Hon’ble MINISTER for Textiles Smt SMRITI ZUBIN IRANI on 21st May. The Hon’ble Minister was kind enough to listen to the issues facing the industry like, demand creation, need for additional working capital, liquidity crunch etc.

We requested the Hon’ble Minister to include the entire textile value chain under the ROSCTL/ RODTEP Scheme so that all the taxes are reimbursed to the exporters of Cotton Yarn, Fabrics and Madeups.

A request was also made to include items like, Quilted products covered under HS Code 9404 under the ROSCTL/ RODTEP Scheme as there is huge potential to increase our exports especially when countries like the USA are seriously considering alternative suppliers to China in the post - pandemic scenario. We also suggested that Cotton Yarn should be included in the Interest equalisation scheme.

Apart from the above issues difficulties faced by exporters in accessing funds as per the RBI's announcements were also brought out during the interaction.

The Hon’ble Minister suggested that the members should bring out the specific issues being faced with the banks so that the Ministry of Textiles can take it up with the Ministry of Finance. Regarding the other issues, Hon’ble Minister agreed to take them up again with the Ministries of Commerce and Finance.

Friends, as we are all aware, the relief measures announced by the Government and the Reserve Bank of India (RBI) on various fronts will take time to percolate to the unit level through the commercial banks and NBFC's. We need to be in close touch with our bankers so that the benefits announced by the RBI are available to us. In case of any recalcitrance on the part of the banks, kindly bring it to the notice of the Council.

TEXPROCIL – The facilitator

In these difficult times, TEXPROCIL firmly stood by all its members by trying to do its best to support the industry. With the Council’s Mumbai and Delhi offices staying closed, our officers and staff are relentlessly working from their homes.

Important issues affecting exports of cotton textiles are being taken up through representations being made to the Government almost on a daily basis.

Query Redressal, Clarifications / Advice on Policy matters are being regularly provided to the members. The Council continues to disseminate vital information availing digital means of communication through E-SERVE E-mail notifications, Daily news IBTEX, fortnightly E-NEWSLETTER.

Certificates of Origin are also being issued online. Members can be rest assured of the Council’s continued efforts to provide maximum support and assistance in these turbulent times.

Meanwhile, it is being noticed that many of the members are yet to renew their Membership with Council for the Financial Year 2019-20. We are glad to inform you that the Council has put in place an online system for renewal of Memberships. The last date for renewal of Membership for 2019-20 is June 30, 2020.

At the same time, members are requested to renew their membership for the fiscal year 2020- 2021 digitally, at the earliest, for which also the Council has made arrangements.
This will enable the members to avail of un-interrupted benefits under the Foreign Trade Policy 2015-20 which has now been extended till March 31, 2021.

Way forward

Friends, nobody expected that a small VIRUS originating in Wuhan City, capital of the Hubei province in China would cause so much havoc across the world putting lives and livelihoods at stake.

Now that it is upon us and is on the verge of peaking and fading away, albeit not fully, we need to look ahead, pick up the pieces and move on.

Innumerable challenges confront us as we move towards restoration of normalcy but they need to be overcome with forbearance and fortitude.

The path is not easy, as it is strewn as the RBI says with "demand compression and supply disruption".

Yet, we need to make it work... somehow!

(Dr. K. V. Srinivasan)