Indian exports: Several key sectors stare at export impact as pandemic rages – The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/economy/foreign-trade/several-key-sectors-stare-at-export-impact/articleshow/82396215.cms

Synopsis–“People are scared to buy from India and uncertain if we can deliver the orders,” said Sharad Kumar Saraf, president of the Federation of Indian Export Organisations. “If cases continue to increase like this, with workers and staff getting infected, we might see an impact.”

India’s exports could take a knock in the months ahead as international buyers have started looking elsewhere for supplies amid uncertainty over delivery commitments as the pandemic rages.

Textiles, garments, automobiles and steel are expected to be the most impacted, exporters said, even as demand recovers in the UK and the US.

Supply-chain disruptions, raw material shortages, Covid-19 cases in factories and diversion of industrial oxygen for medical use have disrupted production across industries.

“People are scared to buy from India and uncertain if we can deliver the orders,” said Sharad Kumar Saraf, president of the Federation of Indian Export Organisations. “If cases continue to increase like this, with workers and staff getting infected, we might see an impact.”

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Steel, one of India’s major exports, is likely to take a sharp hit. With the country facing an unprecedented oxygen crisis amid the second wave of the Covid-19 pandemic, oxygen produced by steel plants has been diverted for medical use and this has impacted production.

The steel sector has been supplying over 3,000 tonnes of oxygen daily for medical use as of late April. “Since India produces custom products, we don’t expect orders to go to other countries. However, many steel plants are now supplying medical oxygen and their existing stocks of steel will get depleted soon,” said Ravi Sehgal, MD of Kolkata-based engineering firm Carnation Industries Ltd. “We might see an impact on exports in June.”

However, in the garments sector, some EU customers are shifting their orders to Pakistan, citing potential worker issues and deliveries in India, according to an exporter.

Saraf said the EU has controlled the pandemic and demand is picking up there but orders of made-up articles are going to Pakistan and a downward trend in exports of these products could start soon.

Made-up articles include products like towels and bedsheets and this category is the second-largest employer in the textile sector, after apparels. India’s garment export orders have been taken away by Cambodia, Vietnam and Bangladesh over the past few years, he said.

Exporters said garment buyers in the US and the UK are placing orders with China but have not yet replaced their Indian suppliers. India has orders till September but supply-chain disruptions are a cause of worry.

“They are weighing their options because textiles is a labour-intensive industry. Though there is no national lockdown, there is no visibility,” said a representative of the cotton textiles industry.

Many automobile companies have shut factories or curtailed production.

India’s exports of goods tripled on-year to $30.21 billion in April, led by shipments of gems and jewellery, engineering goods and petroleum products. The low base of last April, when exports stalled due to the national lockdown, amplified the growth.

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