Exports in March had shrunk by 21.06%, a 67-month low, mainly due to a 60% fall in petroleum exports.
Even as India’s merchandise exports have contracted in value terms since December 2014, a survey by the apex exporter body has clearly indicated that shipments would decline in volume terms as well in the coming months, reports Arun S in New Delhi.
Up to 75% of the 410 exporting companies from across sectors that took part in the Federation of Indian Export Organisations (FIEO) study showed orders from importers in hand in April 2015 was less than that in the same month a year earlier. The decline was in the range of 18-80%, or around 35% on average.
The survey, submitted last week to the commerce ministry, also showed that only 17% of respondents saw a rise in their order booking position in April from a year ago, while over 8% said there was no significant change in the position.
“Normally, exporting firms do not retrench skilled workers even if there is a temporary fall in order bookings. But if the trend continues for the next six months, it will lead to shedding of the workforce,” FIEO president SC Ralhan said.
The factors impacting Indian exports include rupee appreciation against the euro and yen as well as weakening of demand in Latin America, West Asia, Russia, CIS, parts of Africa (South Africa and Nigeria) as well as Indonesia and Malaysia (due to a fall in oil /commodity /metal prices), according to Ajay Sahai, director general and CEO at FIEO.
With Europe being a traditional market for Indian exports (accounting for over a fifth of India’s total exports), exporters have sought a “euro-specific package” from the government to tide over the crisis.
Exports in March had shrunk by 21.06%, a 67-month low, mainly due to a 60% fall in petroleum exports (which comprise nearly a fifth of the total exports) and weak demand overseas. Barring textiles, most major items including engineering goods, gems and jewellery, chemicals and pharmaceuticals contracted in March.