The Terrible Cost of India’s Second Wave

This week, as the world’s worst coronavirus crisis gripped India, devastating images of mass burials and cremations and desperate people seeking help at unbearably full hospitals filled news reports.

India’s Health Ministry registered 386,452 new infections and 3,498 new fatalities on Friday, pushing the death toll past 208,000. But experts say the human cost of India’s second wave is much higher than official statistics suggest.

Everyone in Mumbai and Delhi seems to know at least one person who has died in recent days. Even the wealthy feel the walls closing in on them as the contagion advances, causing some to flee to Dubai, London, the US and elsewhere, as many more stay sealed in their homes.

Some have blamed new Covid variants for the surge, though their role remains unclear. What is indisputable is the failure of India’s ruling party to effectively manage the crisis, compounded by underlying poverty and the weakness of the country’s healthcare system.

The unprecedented rise in coronavirus cases is already putting significant stress on India’s economy, according to key indicators from railway freight volumes to unemployment figures. The surge is devastating the country’s large fashion retail and manufacturing sectors, too, pushing more businesses to failure and deepening the economic hardship faced by millions.

“People are more concerned about their near and dear ones and the immediate priority is health and safety of family and friends and that’s where shopping has taken a back seat,” Sundeep Chugh, CEO of Benetton India, told the Economic Times last week.

It wasn’t long ago that India’s Covid-19 deaths were surprisingly low for a poor and populous country with dense cities and multi-generational households. Business indicators were pointing in the right direction, too. In February, after a year of crisis, stores were buzzing again with enthusiastic shoppers looking for new clothes. By the end of March, retailers had recovered to 90 percent of pre-pandemic sales levels, according to the Shopping Centres Association of India.

Now, as the second wave grows, curfews and other restrictions on public activities in cities such as Mumbai, alongside localised lockdowns in various Indian states and localities, including Delhi, have cut sales revenues in half, according to the Retailers’ Association of India. High profile store openings by several global brands have also been delayed.

E-commerce is also down. Omni-channel partner Ace Turtle, which handles online sales for international labels including Fossil, RayBan, Skechers and Tommy Hilfiger, said online sales for its brands declined by 12 to 14 percent in the March and April period compared to the two months prior. Rival ANS Commerce, which manages Jack & Jones, Bath & Body Works and Aldo, said e-commerce orders were down as much as 20 percent.

In Maharashtra, India’s richest and worst-hit state, a ban on non-essential deliveries has put a stop to online sales altogether, though at the high end of the market some retailers are turning to a combination of video calls and messengers to service what demand remains.

Even when the current crisis does eventually pass, fashion sales may not bounce back as quickly as they did after the first wave of infections with consequences for local and international brands. The economic shock of the second surge is likely to seriously damage consumer confidence, compounded by the fracturing of India’s self-image as a fast-modernising country. No one knows how long it will last but the fear of contagion will surely curtail socialising for months or more in a country where only 2 percent of the population is fully vaccinated.

On the supply side, the country’s apparel manufacturing sector, one of the world’s biggest exporters of apparel and textiles, has seen orders evaporate again, pushing more small players, already weakened after a year of crisis, to shut down as they run out of working capital.

“The impact from the second wave could be more severe given the already weak condition of many players,” said a report by Indian brokerage Motilal Oswal.

Some states are trying to keep apparel manufacturers open in a bid to stop the flight of orders to other countries. The state government of Karnataka, for example, is allowing garment factories to operate at half their capacity despite a wider lockdown in a bid to shelter a sector that employs about 800,000 workers in Bengaluru, the state’s capital.

In the short-term, failure to meet delivery commitments to international businesses could result in penalties. But as the crisis deepens and some foreign buyers divert business from India to other garment manufacturing hubs like Bangladesh, the situation could have consequences for future business, too, resulting in lasting damage to India’s fashion manufacturing sector, which was previously picking up business from brands seeking to curb their overdependence on China.

Among those facing ruin are India’s karigars, artisans whose specialised skills in embroidery, beading, appliqué and other handicrafts have made them critical to global luxury brands. According to a recent report in the New York Times, the surge is putting new pressures on suppliers already in dire straits after a year of slashed orders as the pandemic forced the cancellation of galas, weddings and other big events around the world.

Some local governments have allowed workrooms to stay open, but the costs of virus containment measures, such as dormitories for workers to sleep on site, have increased the burden on already struggling businesses. And as the crisis grows, pushing more suppliers to the brink, global luxury brands may find it difficult to ramp up specialised production again when events return in earnest, leaving a critical gap in their supply chains.

Indeed, as domestic consumption stalls and key parts of the country’s supply chain are disrupted, it’s increasingly clear the damage to India’s fashion industry will be felt far beyond the country’s borders, a devastating reminder that, in a globalised world, no country is truly free from coronavirus until we all are.



Thom Browne Autumn/Winter 2020. Getty Images.

Thom Browne Autumn/Winter 2020. Getty Images.

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Valentino Spring/Summer 2021. Valentino.

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Compiled by Darcey Sergison.