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Unity brings relief in payment for Ludhiana garment makers

Apr '12
The Micro, Small and Medium enterprises in the garment manufacturing sector in Punjab's Ludhiana district are feeling a sigh of relief as they have been able to recover some portion of their outstanding dues from retailers after they forged an association.

In order to tackle the problem of undue delay in payments by customers, more than 50 apparel manufacturers came together to form the MSME Garment Manufacturers Association of Ludhiana (MGMAL) in 2010.

This helped clothing manufacturers in Ludhiana to put up a unified front against those who were deferring payment beyond the 45-day limit allowed under the MSME Development Act, 2006.

The formation of MGMAL has also helped in creating awareness about MSME rights among Ludhiana garment manufacturers.

Mr. Dinesh Gupta, General Secretary of MGMAL, told fibre2fashion, “There are 4-5 apparel retailers whose payments have been delayed for about 2-3 years. While one of them has to pay around Rs. 140-150 million, another customer has to pay around Rs. 100 million to various garment producers.”

“MGMAL has been talking to these customers since a long time. Initially, we did not have any cheques in hand against the payments to be recovered, but now we have some cheques with us. In case of one customer, we have already taken recourse to the legal process,” he informs.

Giving reasons for emergence of such a situation, Mr. Gupta says, “The concept of discount retailing has not done well with the ultimate consumers. For sometime the concept worked, but suddenly customers found it to be just a gimmick and not a genuine discount sale. This affected apparel retailers. Secondly, the retailers were overdoing things. For example, a retailer, capable of operating 100 stores, was eyeing at 400 outlets.”

Fibre2fashion News Desk - India

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