Thursday, June 4, 2009

80% exporters face drop in order size: Survey

Exporting community still faces the gloomy situation on account of global slowdown with about 80 per cent of respondents to a PHD Chamber survey saying their order size and volume have dipped over the last year, specially in markets in Europe, the US and Latin America.

The survey on effect of global slowdown on country's Foreign Trade revealed that 40 per cent of respondents said the delay in payments was affecting their business.

About 76 per cent respondents said that there has been a marked drop in order size over the last quarter (Oct-Dec). At least 78 per cent of respondents have seen a marked drop in order of up to 40 per cent in volume of exports and 21 per cent have seen a fall of more than 50 per cent.

The survey included a sample size of 104 respondents in MSME sector, mainly covering industries like textiles and handicrafts, wood and furniture, home furnishings, garments and carpets.

The badly-affected export community is eagerly looking for government to initiate steps like providing special packages to boost and promote exports, reduce rate of interest and excise duty, uniform VAT in all the States, Income Tax rebate on exports, relaxation on import of raw materials, increased duty draw back and reduced transportation costs.

The exporters are handling this changed scenario by exploring the alternative markets, apart from developing demand in local areas.

The textiles and handicrafts industry has witnessed a drop in demand of 30-40 per cent over the last year, while the carpet industry has seen a drop of 50-60 per cent over the last year, with the major affected markets being Europe and the US.

The readymade garments sector saw a drop of 40-45 per cent in demand over the last year and wants the Government to increase the percentage of duty drawback.

Along with the global crisis, the reasons for fall in volume of exports were that buyers wanted less lead time and were buying nearer the season.

The electrical machinery sector, where the major markets were West Asia, South and South East Asia, CIS countries and Africa, the reasons for fall in volume of exports were global economic meltdown, crude oil dipping and drying up of liquidity in the financial system.

The preferred strategy of exporters to maintain the growth momentum in electrical machinery would be to focus on project exports, search for new markets, long term rate contracts with key customers, providing financing support through government line of credit and EXIM banks buyers credit.

The industry wants the government to provide export incentives like re-introduction of target plus schemes, availability of DEPB Schemes for export projects, reimbursement of indirect cost due to country specific constraints, provide greater support with enhanced line of credit facilities, provide competitive long term financing.

No comments:

Post a Comment

Related Posts with Thumbnails