Indian clothing companies have serious defaults and need to be vigilant

From a recent report in “India Business Online”: Rahul Mehta, president of the Indian Garment Manufacturers Association, said that the normal payment cycle is generally 30 to 60 days, and has now been extended to 6 to 8 months, which has led to the entire clothing The industry is in a payments crisis. In some extreme cases, buyers disappear without paying.
For this purpose, the Garment Manufacturers Association of India (CMAI) has increased the membership of the Industry Arbitration Committee from 4 to 15 in order to provide arbitration representative seats for every sub-sector of the apparel industry.
In addition, 80 volunteers form a supervision team to monitor developments. These volunteers represent the interests of garment industrial real estate and garment industry clusters. The Garment Manufacturing Association has also called on wholesalers, distributors, agents and retailers in the apparel industry to hold a meeting in Mumbai to discuss the issue.
Most apparel manufacturers need to wait during an 18-month “quiet period” before applying to be president of the CMAI arbitration committee. The output value of India’s apparel industry exceeds US$45 billion. Because the apparel industry involves multiple links such as retailers, distributors, and agents, and the industry structure is also very fragmented, many apparel companies have no way to control their accounts receivable. To this end, the Indian Garment Manufacturing Association has launched a motion to unite various stakeholders in the apparel industry and ensure timely payment by all parties.
Rajesh Masand, vice chairman of the Payment Committee Arbitration Committee of the Indian Garment Manufacturing Association, said that once the association accepts a complaint about payment default, it will bring both parties together to resolve the problem through friendly negotiation. If this approach fails to resolve the issue, the association will disclose the bad behavior of the defaulter to 80 garment industry stakeholders. These people or companies will spread the bad behavior of the defaulter to other peers, making it impossible for the defaulter to gain a foothold in this field.