‘Govt should come up with support package for warp-knitting industry’

Industry and Lockdown

Ajay Mehra, managing director of Varinda Knitters Private Ltd, established about 20 years ago, has been manufacturing net and lace fabrics, which are used in fashion fabric garments, dupattas and lehengas. It is multi-use fabric, which is used in a range of products, including upholstery of cars, home, textiles, travelling accessories, men and women wears. He has been supplying the fabrics to various places, including Kolkata, Delhi, Mumbai and Surat and garment exporting units. Ajay, who is also the president of the Amritsar Warp Knitting Association, discusses the impact of the lockdown on the warp-knitting industry in an interview with Neeraj Bagga. Excerpts:

How has the lockdown impacted your warp-knitting business?

The demand has vanished with markets being closed due to the lockdown imposed to contain the spread of Covid-19. The state government has allowed the functioning of the unit with a rider to maintain social distancing and making lodging arrangements for labourers on the premises. In a labour-intensive industry, it is not possible to abide by such regulations. So, I decided not to resume the manufacturing work as it may jeopardise the health of workers. All payments are struck and under the given circumstances, we are apprehensive of getting back. The entire sale rests on credit and raw material comes from Maharashtra and Gujarat where companies sell yarn on cash or ask 18 per cent above its rate. Stocks of raw and finished material are lying in factory godowns.

Do you expect resumption of your business in near future?

It will take a long time to revive the business. It is not possible by lifting the curfew in a district or some packets. Since manufacturing and trading depend on inter-state movement, the nationwide lockdown must be lifted. There were many expansion and technology upgrade plans, but they have been put on hold for now. Our first priority will be to collect the funds scattered in the market and request the Ministry of Textile to reimburse the 10 per cent subsidy. Around five years ago, knitting machines were imported from Germany under the ministry’s Technology Upgradation Fund (TUF).

How are you dealing with the issue of paying salaries to workers?

All employees have been paid their March salary. But, they are yet to be paid for April. We are figuring out how to pay the salaries. A large number of semi-skilled and unskilled labourers are involved in the manufacturing work. They include both migrants and locals.

What is the share of online trading in your profession?

There is no share of online trading. In fabric, a buyer wishes to have a look at the product before purchasing it. So, samples are dispatched to the prospective customers and final orders come subsequently.

Do you consider the current crisis as a challenge or an opportunity?

It is more a challenge. Survival has become important as the lockdown offers a tough time to the business. Some people think that investors may pull out of China and India may be lucky to host them. However, it seems be a remote possibility as the Chinese government provides vast support to its industry and over the years, massive infrastructure has been built, which is hard to beat.

What are your expectations from the government?

We pay taxes, but there is no support from the government. It can collect higher taxes, but it should at least ensure pension after retirement. The government should pay salaries out of the ESI and EPF funds. It should come up with a package for the MSME units in general and the warp knitters in particular. Loan installments to be paid by the MSME units should be deferred for the next three months without any interest. At present, the government is only prolonging the pay-back time of loans and cash credit limits extended to industries.