Gurugram: Factories in the lurch as inter-state travel curbs hit supply chain, availability of labour
With Haryana increasing restrictions on interstate travel to and from Delhi, industry owners in the district are uncertain as to when production activities in Manesar, Udyog Vihar, Daulatabad and Basai will resume. While they were hopeful that the period after April 20 would allow for the resumption of factories, at least at a reduced capacity, sealing of the state’s borders have left them in the lurch again, said industry owners.
Gurugram is the centre of manufacturing and business in North India; yet it looks like the restrictions, especially regarding the inter-state movement to and from Delhi, will create problems in return to normalcy.
Faridabad, also a factory hub, sealed all five of its borders with Delhi on Wednesday, imposing a ban on the entry of all commuters, including essential workers. In Gurugram, curbs on non-essential travel to and from Delhi started Tuesday, while the issuance of interstate travel passes was also put on hold.
VS Kundu, chief coordinator for Covid-19 in Gurugram, said that an official notification to seal the Gurugram’s borders also is expected by Thursday. “Interstate movement with Delhi would likely to be put on hold, maybe from Thursday night or Friday morning,” he said.
In a message to the press on Wednesday, Amit Khatri, the deputy commissioner of Gurugram, said, “If anyone needs to come from Delhi to Gurugram for work, we would advise them to make arrangements to remain here.”
Transporters have been refusing to accept bookings for ferrying goods and raw materials to and from Gurugram due to the curbs, said factory owners. “We are not able to procure either raw materials from Delhi, nor are we able to get rid of the old stock by sending it outside the district,” said Animesh Saxena, general secretary of the Garment Export and Manufacturing Association.
“Not just Delhi, the news has created panic and truckers are refusing to provide services to other states also,” Saxena said.
Gurugram shares 11 borders with Delhi and three of them — Kapashera, Sirhaul and MG Road — are vital business lifelines. There are 2,200 manufacturing units in IMT Manesar, up to 1,000 in Udyog Vihar, 500 in Sector 37, besides a few in Daulatabad and Basai, according to the Gurugram Industrial Association.
About half of them are involved in automobiles, component manufacturing for automobiles and allied industries, followed by garment manufacturers, packaging and consumer goods, and pharmaceuticals, all of which are now uncertain about when production will resume.
Explaining that many micro, small and medium enterprises (MSMEs) rely on wholesale markets in Delhi to procure raw materials, Sunil Panwar of the IMT Industrial Association said, “If they shut the borders with Delhi, a lot of raw material will simply not reach us. This will adversely affect those mainly working in garments and plastics, not so much automobiles, which have a more elaborate and global supply chain.”
Umesh Dwivedi, an MSME proprietor in Daulatabad, said, “Even if, through some dedicated effort, raw materials do reach us, finished goods will not be allowed to renter Delhi.”
Additionally, the presence of factory owners and managerial staff residing in Delhi is needed to ensure that social distancing norms and guidelines for the safety of labour are followed. “If they cannot come to work and supervise, how will things continue? The workers cannot operate on their own,” Dwivedi said.
According to industry owners, the ministry of home affairs’ guidelines on the resumption of industries are better suited to MSMEs, which employ fewer people and operate with smaller capacities. While automobile manufacturers have been given permission to resume their work, many smaller unit owners are still awaiting permission. However, MSMEs, which are dependent on less-complicated supply chains, would have been able to resume activities and enforce social distancing much faster, proprietors said.
Panwar said, “Automobile manufacturers will take at least another 20 days to take stock of materials all along their supply chain, which is more complex and spread across the globe. MSMEs could easily have enforced social distancing and continued work, but permissions for many of them have not been granted yet. It will be hard to resume work if Delhi borders are sealed.”
An industry owner estimated that if the lockdown is lifted after May 3, it will take at least three months for production to gain momentum. Ashok Kohli, president, Chamber of Industries, Udyog Vihar, said, “Even after lockdown is relaxed, the normalcy in the industry sector will return in at least three months, or not before September. By then, summer will be over and products manufactured for sale in summer will lose their value. The supply chain has been disrupted and workers, in large numbers, have left. The fear of the virus will remain until we find a cure. The industry has been set back by three years in terms of production and to compensate for the loss, it may take as much time.”