March 2020 exports down 34.57%
FIEO President Sharad Kumar Saraf expects about 80-85% of the manufacturing to restart gradually and augment supply, bringing exports and manufacturing back on track following the government decision to allow opening of economic units in rural areas.
“This would also give a very positive signal to the World that India is confident to contain Covid-19 through its well thought and early measures,” said Saraf, welcoming the Home Affair Ministry’s guidelines to restart manufacturing.
It will be a psychological boost to migrant workers also who were getting desperate with extended lockdown and contribute to the country’s output, he added.
The industry is also relieved as the wage and other charges will cause lesser burden on them with the commencement of production.
He pointed out that COVID-19 and weak crude oil prices have slowed down major economies including China and the United States.
India’ March 2020 export declined by 34.57% to US$21.41 billion due to the spread of Covid-19 across the globe, affecting the the global supply chain.
“Global economies are facing the worst crisis in terms of slowdown compared to the global depression of the 1930s,” he said.
China, US and the economies of Europe, Japan, South Korea, Australia, Russia, Gulf countries are facing the brunt as oil and other commodity prices have drastically declined during recent days.
The short-term perspective of the exports sector looks grim, Saraf pointed out.
However, from the second quarter of the fiscal, exports may start showing nominal growth depending on the condition evolving in the international market, he believes.
Except for iron ore, 29 of the 30 major export products were in negative territory during March 2020, most of which were due to the Lockdown 1.0 in the second half of the month.
March imports also declined 28.79% to US$31.16 billion.
Saraf is seriously concerned over sharp decline in employment intensive export sectors, pointing out that serious ramifications for the jobs in the country particularly as domestic demand will also not be robust.
He reiterated the impact of cancellation of over 50% of orders, gloomy forecast, major job losses and rising NPAs amongst exporting units.
He called on the government for immediate relief package for exports as any further delay would be catastrophic.
He suggested Covid Interest free Working Capital Term Loan to exporters to cover the cost of wages, rental and utilities, EPF and ESIC waiver for 3 months from March to May 2020 and Extension of Pre and Post shipment credit by 90-180 days on their maturity
These are much needed step to help the exporting community during such difficult and testing times, said FIEO Chief.
Besides roll over of forward cover without interest and penalty, automatic enhancement of limit by 25% to address liquidity challenges and extension of Interest Equalisation Benefits should also be looked into for immediate consideration, he suggested.
President FIEO cautioned that the huge support given by various economies to exports will put Indian exports in further difficulties as competition intensifies with focus on prices. fiinews.com
