Following Russia’s invasion of Ukraine, major companies such as Mango, Zara, and H&M have paused operations in Russia, resulting in a 25 percent drop in new orders for readymade garment manufacturers in Tirupur and Noida. Inditex, the Spanish apparel company that owns Zara, has ceased operations in Russia, closing its 502 stores and ceasing online sales a week ago. H&M has ceased operations in Russia, while Mango, Spain’s second-largest fashion retailer, has temporarily shut down its 120 stores in the country.
According to Lalit Thukral, president of the Noida Apparel Export Cluster, “garments were channelled to Russia through Spain.” Fresh orders have decreased by 15% since all worldwide brands have ceased operations, he added. “We are concerned about payments that have become stalled as a result of the Russia-Ukraine conflict,” Thukral added.The apparel export cluster in Noida houses 3,000 units, with an annual turnover of nearly Rs.30,000 crore.
Shipments through the Black Sea have also come to a grinding halt and exporters are now sending garments by air. The air freight rate has shot up to Rs.500 per kg from Rs. 150 per kg. “Buyers will not pay for rising freight rates,” said Thukral. Tirupur houses 2,000 knitwear garment export units and another 18,000 ancillary units that supply to knitwear firms.
