Impact of COVID-19 on the Fashion Industry in India

5 min readNov 7, 2020


With COVID-19 cases still increasing at an alarming rate, there has been a steep decline in the global economy with India being one of the worst hit countries with Q1 GDP declining by 23.9% as compared to last year. Broken healthcare systems, lack of food, unemployment, domestic violence have all pushed us a decade back in time. Imagine all the personal growth that you might have had over the past 10 years and it gets wiped away in a matter of months. This is what happened to our country.

Fashion industry is no exception when it comes to the adverse effects of the pandemic on businesses. It has been hit hard due to the COVID-19 crisis. From material manufacturing to supply chain and consumption, every aspect of the industry has been swept away by the flood of cases globally.

One of the most adverse effects of the pandemic on the fashion industry can be seen in Bangladesh. Readymade clothing factories in the country employ more than 4 million people and the industry accounts for 13% of the nation’s gross domestic product. It is estimated that over USD 1.5 billion worth of garment orders going to the country have been scrapped impacting around 30% of the garment workers’ jobs.

How are fashion brands reacting?

In the past few months, fashion brands, retailers and influencers have had to pivot in a desperate attempt to stay relevant. Everyone started manufacturing masks, not just to meet the unmet demand but also to stay open as an “essential service”. And somehow the brands found a way to highlight the class divide through masks as well with the elegant few sporting designer masks. But, that’s a topic for another day.

Despite all the pivots and innovations, stores are being shut, malls are closing down, companies are declaring bankruptcy and worst of all — people are losing jobs. JC Penny, J Crew, Brooks Brothers filed for a chapter 11 bankruptcy, Zara, E-spirit, Aldo closed several of their stores permanently and pretty much every fashion brand on this virus-infested planet had to downsize.

Some companies have fared better than others with them taking early steps to curb the damage after witnessing what happened in China in early January. As a matter of fact, luxury brands Chanel and Louis Vuitton raised their prices during the pandemic. Our guess is that while therapy became important and valuable during the crisis, so why not retail therapy.

We live in an age where fast fashion means that there are 52 seasons every year with new collections dropping in every week. This has now reduced to our regular 2 season due to fashion events getting cancelled across the fashion capitals of the world. A plethora of major fashion events have been either cancelled or were postponed. Some of the notable ones were Chanel’s Métiers d’Art show, Ralph Lauren’s fall 2020 show and Burberry’s fall 2020 show.

How does it affect the Indian fashion industry?

The Indian fashion story is no different. It is estimated that the pandemic may cause a 30% reduction in revenues for organized apparel retailers. This huge drop will be felt across the value chain. At the same time, the Indian fashion industry has responded in a hopeful manner. The Fashion Design Council of India (FDCI) was amongst the first to announce a COVID-19 Support Fund for small businesses and young designers in need.

There is this one key difference in the Indian fashion scenario as compared to the west. Unlike the western culture, where consumption is primarily linked with the changing season, Indians tend to spend more during the festive seasons. With the weddings postponed and festivities being restricted to homes, designers and private sellers suffered huge losses. Top Indian designers like Manisha Malhotra, Sabyasachi and Tarun Tahiliani took a pause from their operations. With the upcoming festive season and wedding getting back on the map, these brands, retailers and designers are now looking forward hopefully.

What the experts have to say?

Ritu Kumar, one of the most prominent designers in India had a grim outlook on the situation. “Business had slowed down after demonetisation. Now, there will be a trend of need-based buying. I won’t be surprised if we are pushed back by another 20 years.”

Jugnu Gosrani, a designer from Mumbai shared her thoughts on the piled up inventory. “We are all saddled with unsold merchandise. This month, I managed to sell kurtis, dresses and skirts online in my housing society itself. Customers order online. I leave the outfit outside their door in a sealed plastic bag.” She is now making Kalamkari masks from the leftover fabric as she feels that, it is the in thing at this point.

Designer Rina Dhaka said in her interview, “Work is a struggle and one is trying to get up again. I will also simplify the couture. Maybe more as singles or separates to make the spending easier.”

“Fashion trends will vary as the world slowly emerges from the global quarantine. With weddings now becoming more intimate, smaller in size, the fusion trends will find favour with both brides and bridesmaids. Mirror lehengas, organza skirts, pre-stitched sarees, necklet gowns, dhoti-crop tops in handwoven fabrics and hand-done embroideries with traditional textile techniques will trend. It will also help support the rural artisans and handloom communities,” mentioned Nishit Gupta, director of Kalki Fashion, in one of his interviews.

How has COVID-19 changed the way we consume fashion?

With a majority of the population reducing their fashion spend, activewear and loungewear is on the rise. But, this is more of a short-term need as compared to how dressing might evolve with this pandemic. There are already some slight shifts in masks becoming a part of your OOTD. There might also be a shift towards more sustainable means of manufacturing clothes owing to a shift in the consumer mindset around conscious living.

Even in terms of the mode of shopping, social distancing has ensured a lot of trailblazers of digital adoption move towards online shopping channels. E-commerce has seen a growth like never before. This has been an extremely opportunistic event from their economics point of view. No wonder Mr. Bezos has doubled his net worth during the course of the pandemic when most businesses are just struggling to stay open.

The pandemic revealed the vulnerability of global supply chains as countries restricted international trade, supply chain logistics were disrupted, and orders were cancelled due to sudden diminished demand. The recovery of the industry will not only be slow, but also significantly different.




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