Indian apparel and textile firms face a 30 per cent decline in revenue and profitability if the COVID-19 crisis continues. The closing of retail areas such as malls and high street shops, along with the general advisory for avoiding public spaces, has hampered demand. Unless the current situation persists, several more concerns will undoubtedly emerge. Indian textile manufacturers may need to look at other alternatives, including local procurement, which could in effect raise the cost of finished products by 3% to 5%. Besides this, finding vendors in such a short time will result in a toll on lead times, quality and cost.
Mostly, there would be the question of lack of working capital. The money flow would be insufficient for tax payments, discharge of bank interest, repayment of loans, legislative dues, etc. If the Coronavirus pandemic continues longer, India can expect a 0.5 per cent impact on economic growth this fiscal. If the virus persists for longer, the economic effect would be important, and long-term. There’s even danger of expanding the fiscal deficit. The Banking sector’s NPA rates are expected to grow. It is likely that exports and imports are contracting. Though hospitality, tourism, aviation, auto and car ancillary will be hit hard, the pandemic will profit pharmaceuticals and healthcare.