The country’s merchandise exports will further revive in the coming months as order books are showing signs of improvement, even as the industry is still facing labour shortage, according to exporters. Ajay Sahai, director general of Federation of Indian Export Organisations (FIEO), said there is no problem of orders in the shorter run, but exporters are still not getting long-term orders.
“We are expecting that the situation will improve further as the order book situation is improving. Orders are mainly coming from the US and European countries,” Sahai said. On labour shortage, he said that factories are still not running at full capacity,but the situation will improve in the next few months.
Council for Leather Exports Chairman P R Aqeel Ahmed said the sector is doing well as “our order books are improving”. Sharing similar views, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said there is a positive sentiment for Indian goods and this is helping in pushing the outbound shipments. “Orders are coming. This year we are hoping that we will be able to significantly increase our exports. Factories are running at about 60 percent capacity. By November, we will be able to reach the pre-Covid level,” Sakthivel said.
Ludhiana-based Hand Tools Association President S C Ralhan too said that orderbooks are good with engineering exporters. “But we are facing problems because of labour shortage. Still only 50 percent of the workers are coming to factories and due to this, we are not able to ramp up our production,” he said. Ralhan hoped that after the flood water recedes in states like Bihar, labour movement would start. Export Promotion Council for Handicrafts (EPCH) Executive Director Rakesh Kumar said that orders are coming, but due to shortage of workers, there is a problem in boosting production. “Labours are not coming in full shifts,” he said.
Kumar also urged the government to address issues related to merchandise export from India scheme (MEIS) as exporters are not able to fix the prices on their products. “MEIS helps in increasing the price competitiveness of exporters, but due to the uncertainty over the scheme, exporters are in confusion over fixing the price of new orders,” he added. India’s exports fell for the fourth straight month in June as shipments of key segments like petroleum and textiles declined but the country’s trade turned surplus for the first time in 18 years as imports dropped by a steeper 47.59 percent.
Export sectors which recorded negative growth in June include gems and jewellery (-50 percent), leather (-40.5 percent), petroleum products (-31.65 percent), engineering goods (-7.5 percent), ready-made garments (RMG) of all textiles (-34.84 percent), and cashew (-27 percent). Import segments which recorded negative growth include gold, silver, transport equipment, coal, fertiliser, machinery and machine tools. However, exports of oil seeds, coffee, rice, tobacco, spices, pharma, and chemicals reported positive growth in June. During April-June 2020, exports fell by 36.71 percent to USD 51.32 billion while imports shrank by 52.43 percent to USD 60.44 billion. The trade deficit stood at USD 9.12 billion during April-June.