Indian exporters, who witnessed a near collapse of demand earlier in the year, are no more complaining even as a second wave of coronavirus hit Europe. Though the virus is once again spreading across the continent leading to concerns over economic recovery, exporters in the country said that there has been no cancellation of orders or change in the overall query trend.
While many countries have imposed lockdown to contain the spread of the virus, the measures are not as stringent as they were in March-April, Ajay Sahai, director general and CEO, Federation of Indian Export Organisations (FIEO), said.
Last month, the Federation said that the number of queries for sourcing goods were about 20 per cent more than the pre-Covid times and about 60 per cent of these have been turned into orders.
“We have witnessed a surge in export queries, it is actually more than the pre-Covid times,” Sahai had told IndiaNarrative.com.
Besides, anticipation of the launch of a vaccine to Covid-19 in the next two months—at the end of the year—has helped the export sector. “Uncertainty remains, and typically queries and orders are for a three- to four-month horizon instead of a six-month period, but news of a vaccine, expected to be launched by the year-end, has given a boost, the psychological barrier is taken care of,” Sahai added.
However, an exponential rise in freight costs, shortage of containers and other supply-side constraints owing to local lockdowns at several places in the country continue to remain a cause for concern. Freight, both sea and air, has risen significantly over the last few months. Sea freight alone has gone up by about 60 per cent.
<strong>Anti-China sentiments spurt query numbers</strong>
Queries for export orders for engineering goods, chemicals, and plastic among others have increased significantly for India, especially from Australia, New Zealand, Canada, France, Germany, Sweden and the US. Many of these countries have openly expressed concerns over China’s current aggression and its handling of coronavirus.
The rise in anti-China sentiments globally has fueled the country’s export sector, which until recently had been struggling to increase its share. The US-China trade war has also led to a rise in uncertainty for China.
India’s share of total global exports in dollar terms was less than 2 per cent between 2010 and 2018. However, it now needs to completely open up the economy and act fast to ensure that it does not lose out an opportunity.
India’s exports for 2019-20 declined by 4.7 per cent. In March alone, the country’s exports declined 34.57 per cent due to the spread of coronavirus globally. Economic Survey—the official report card of the government—in January said that Make in India, the flagship program of the Narendra Modi government, should integrate with the ‘Assemble in India for the world’ to provide the necessary fillip to the export sector. The Survey noted that India can increase its export market share to about 3.5 per cent by 2025 with about 4 crore well paid jobs. China’s growth engine was export driven, as it became the factory of the world.
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