Covid-19 aftermath: Orders getting cancelled and crisis grips export hubs
As a result of migrant workers coming back to their homes following a country-wide lockdown and interruption in the vast swathes of US and European Union markets, the export hubs in India are plummeted by an unprecedented crisis. About 20 -30 percent of orders had been cancelled for various product categories from Tirupur, Chennai, Surat, Hyderabad, Pune and Kochi hubs.
In India, almost 25 of the top destinations for engineering goods exports are facing a lockdown, which together constitute for USD 53 billion exports in the April-February period.
“We anticipate losing one quarter’s businessdue to the current situation that has affected the world as a whole. Until now, there has been hardly any
enquiry from the US and European Union markets,” said Rafeeque Ahmed, Chairman of leather exporter Farida Group.
Exporters from the country’s largest garment hub Tirupur forecast a slide of 50-60 percent year-on-year in despatches for the coming financial year. They expected to have shipped out apparel worth Rs 26,000 crore for FY20. It is reported that the summer sales from leather companies in Chennai are gone, with uncertainty existing in winter orders.
The EU, the US and China together account for 40 percent of India’s overall goods exports. It is expected that Indian pharmaceutical companies will get hit due to the interruption in supply of raw materials from China. Though the market demands continue to show a good growth, the manufacturing facilities are operating at below-normal levels.
As tyre companies have shut production, more than 4,500 natural rubber dealers and one lakh farmers in Kerala are in jeopardy. It has been reported that the dealers have incurred a loss of Rs 400 crore during the first week of the lockdown.
As per the Chinese data, for the months of January and February of 2020 trade between the two countries was down by 12.4 percent year-on-year. Experts in India-China trade foresee that sectors in pharmaceuticals, healthcare, and non-traditional securities are likely to gain focus as it may become the new sectors for trade. The ripple effect of the pandemic is expected to seriously hit the agricultural markets too across the Indo-Pacific region, including China.
Experts point out that the global value for goods like cotton will be affected in the second half of 2020 if the coronavirus situation is going to continue further.