The Garment Industry, which is reeling under severe cash crunch, has recovered Rs. 400 crore in last three months from retailers who had defaulted on payment due to weak demand.
The Clothing Manufacturers Association of India (CMAI) has formed a separate committee to negotiate with defaulters and recover the dues. The association has also formed a system to alert the members on the credit profile of buyers so that they do not fall prey to wilful defaulters.
CMAI president, Rahul Mehta said the recovery committee of the association has taken up long pending cases and negotiating to recover Rs. 1000 to 1500 crore. The growth in garment sector was hit by economic slowdown and demand for electronic items growing with attractive offers from ecommerce websites, he said at a function to announce the 61st National Garment Fair starting on June 29. The largest ever fair is expected to attract 780 brands and 40,000 retailers over the three days of the event.
“I believe that some sense will soon prevail in the working of ecommerce companies as they cannot keep on buying topline. The angle investors who had invested millions of dollars would start booking for the bottomline,” he added.
The domestic organised garment sector registered a growth of 12 per cent to Rs. 44,800 crore last fiscal against a growth of 7 per cent in fiscal year 2013-14.
