“‘The Buyer is God’: How Unfair Purchasing Practices Occur ‘With Impunity’ in India’s Garment Industry”, 30 May 2025

Fashion brands in the United States, United Kingdom and European Union sourcing garments in India are canceling orders, delaying payments, soliciting discounts and failing to account for rising labor and material costs, according to a new survey of nearly 200 suppliers across seven of the South Asian nation’s states…

Some 44 percent of respondents…reported brands insisting on discounts after the contracts were agreed upon, while 53 percent said they’ve received cancellations in the middle of production. Another 52 percent said that buyers don’t adjust for increased prices of inputs like fabric, and 81 percent said any uptick in minimum wages was ignored. One-third (33 percent) of those polled said they had their payments held back by three months or more. Half of the suppliers reported brands quoting a large order size before reducing it—and keeping the cost per item unchanged.

“[Our contract said] ‘payment terms may be subject to change based on internal policies,’” one supplier was quoted as saying. “What does that even mean? It means that they can delay payment whenever they want. And if we protest, they will say, ‘We will reconsider working with you in the future.’”…

More than half (54 percent) of respondents reported having to undercut the price of their production for one or more of their contracts. A burgeoning number also said they’re being increasingly forced to pony up for quality checks by brand-appointed purchase agents, third-party audits and even the hotel and transportation expenses of visiting representatives…

…suppliers reported bumping up working hours (77 percent), the number of contract workers (64 percent) and production targets (58 percent) to cope with sudden contractual changes. What happens next is that workers…are seen as almost disposable units of labor…

… 90 percent of the surveyed manufacturers said they avoid resorting to legal action when their buyers breach their agreements, saying that it would be too expensive or too risky reputationally. The potential loss of business is also why… suppliers were hesitant to name and shame the offending brands. The industry in India is smaller, they reasoned, making it easier to suss out potential whistleblowers…

“One manufacturer had a sign in his factory that read, ‘The Buyer is God.’ So, we did not press manufacturers to name brands…

That the research took place before the imposition of additional 10 percent tariffs by the Trump administration—with the potential for more—can only be expected to exacerbate these trends…

“This research indicates that manufacturers continued to be squeezed by brands and retailers,” Anner added. “They are squeezed on price, squeezed on order size and squeezed through payment delays. And we know from prior research that this squeeze is transferred to workers through

Transform Trade has thrown its support behind calls in Britain for a garment trade adjudicator, similar to what it already has in the groceries sector, to ensure that brands selling to the U.K. market adhere to a statutory code. The EU’s directive on unfair trading practices in the agricultural and food supply chain, it says, can further act as a model for a directive banning unscrupulous buyer behavior in the apparel industry.

“There’s a lot of voluntary work around purchasing practices, and we just don’t have the regulation that actually keeps [brands] to it,” said Hilary Marsh, garment policy advisor at Transform Trade. “The way it works with groceries is that it’s its own entity, and it does its own investigations based on complaints that can be shared anonymously. So that helps with the issue of suppliers not wanting to speak up and [identifying] who they are.”…

“Usually, the first people to be harmed in that are the garment workers, and the risk is put down to the manufacturers,” Marsh said. “There was a big spark in public recognition and public outcry around what was suddenly very visible during the pandemic of these practices happening. And they’re still happening. It is the way of the business.”