Indian textile exporters seek government aid to pay wages

Indian textile exporters seek government aid to pay wages

By Manoj Kumar

NEW DELHI (Reuters) – Indian textile exporters, which employ about five million workers, have sought government aid to pay wages after cancelling about $4 billion in overseas orders amid a nationwide lockdown to combat the coronavirus.

In a letter written to Prime Minister Narendra Modi on Monday, the Apparel Export Promotion Council (AEPC), representing about 8,500 exporters, urged the government to pay workers’ wages for at least April and May from the social security fund, set up with contributions of workers and employers.

Millions of workers in India employed by small manufacturers are staring at losing their jobs after the lockdown imposed by the government late last month.

India had 17,264 cases of coronavirus infections and 543 deaths as of Monday.

The government unveiled a fiscal package of 1.7 trillion rupees last month to provide food and cash to the poor and is widely expected to announce a second stimulus package in the next few days.

“We are in a real crisis,” AEPC chairman A. Sakthivel told Reuters, citing cancellation of orders by buyers from Europe and the United States – the biggest markets for India’s $15 billion annual garment exports.

“The sector urgently needs a big stimulus package from the government,” he said, adding that many factories, already facing a slowdown after a dip in global trade due to U.S.-China trade frictions, could soon close.  

The lockdown has resulted in stoppages in thousands of garment factories on the outskirts of Delhi, Mumbai, Chennai, Kolkata and other cities, he said.

The government should pay wages as an unemployment allowance from the Atal Bimit Vyakti Kalyan Yojana (ABVKY)- part of a social security fund run by the labour ministry, the AEPC letter said.

Last year, the government told parliament that in an emergency, the workers were eligible to get an unemployment allowance for up to three months under the scheme run by the Employees’ State Insurance Corp, having cash reserves of 743 billion rupees ($9.72 billion) as of March 2018.

On Monday, the government eased some restrictions and allowed some businesses to open in rural areas and special economic zones while following social distancing and other guidelines.

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