The Governance Challenges of Social Upgrading in Apparel Global Value Chains in the Context of a Sourcing Squeeze and the Covid-19 Pandemic

Freedom of association and living wages are two fundamental components of social upgrading in global value chains. However, in the apparel sector, the power afforded to lead firms due to industry consolidation has resulted in a squeeze on suppliers and on workers that is reflected in terms of low wages and increased worker rights violations. This squeeze down the supply chain has been exacerbated by the Covid-19 pandemic, with many lead firms abruptly cancelling orders without paying supplier factories for their orders. Millions of workers were adversely affected through lost income, lost jobs, and increased food insecurity. The sourcing squeeze and the Covid-19 crisis thus illustrate decent work governance gaps in global value chains. This chapter argues that these gaps can be addressed via a transformation of the institutional context in which GVCs operate. This involves collective bargaining and other binding agreements and more effective public governance. These arguments are illustrated through the country case study of India.