More countries close borders, order cancellations rise; biggest hit on gems & jewellery, lifestyle goods, carpets and handicrafts; impact to come with lead time of around 3 months
Exporters are bracing for at least a $1 billion decline in outward shipments in February as countries close borders and order cancellations increase due to the spread of Covid-19. With labour intensive sectors like gems and jewellery, lifestyle goods, carpets and handicrafts expected to get impacted the most, traders expect the impact to come with a lead time of around three months.
“If orders are not finalised now, then there will be a lead time of three months. Remittances will be affected since only essential purchases are happening,” said Ajay Sahai, director general, Federation of Indian Export Organisations. The association has cancelled already 10 of its international shows in March and April, and two in India.
India on Wednesday suspended all tourist visas till April 15.
“Our clients in the US have put their orders in abeyance. At present, orders worth Rs 1.5 crore have been put on hold for 20-30 days,” said Mahavir Sharma, founder of Jaipur-based Oscar Expo Design LLP, an exporter of wooden furniture, carpets and silver jewellery. Lower crude oil prices, too, are expected to impact the value of exports.
“Though no orders are cancelled as of now, we are struggling to sell our goods and cancellations might start showing up in the next 10-15 days,” said Ashok G Rajani, founder-chairman of Mumbai-based apparel exporter Midas Touch Exports.
Industry experts said the cancellation or postponement of exhibitions and conferences worldwide have hammered the $2.5 trillion trade show industry. Frankfurt’s Light and Building has been postponed over coronavirus fears, and will now take place in September instead of March. Similarly, the Milan Furniture Fair, which was scheduled for the end of April has now been pushed to June.
“Demand is low on certain products such as steel and ferro-alloys because Italy is a major market,” said an Engineering Export Promotion Council official, adding that West Asia is seeking more Indian products.
“Earlier the problem was the import side but with China now stabilising, they also will have inventory that would put pressure on prices. There is uncertainty,” the official added.
On the food front, industry has seen a 12-15% decline in meat exports and slowing demand for rice.
