Signs of Recovery
In the last few months, the world’s focus has not moved an inch away from the coronavirus and the situation is likely to be the same in the coming quarters as well. With world economies, including India, lifting the lockdown and opening shops in phases, it looks like it’s time for the world to embrace ‘the new normal’.
Talking about international trade, Indian exports may have boarded the recovery bus. Commerce Minister Piyush Goyal said that June exports may fall by only 10% as against April and May, which dropped by 60% and 35% respectively. India has also majorly lifted export restrictions on COVID-19-essential commodities, excluding PPE kits. Apparel industry leaders have also requested the government to lift the PPE kit export ban and seize on an otherwise-lost opportunity.
Having said that, Indo-Chinese diplomatic issues will continue to pose a threat to this recovery trajectory as exporters from both countries stare at the possibility of a major supply chain disruption in the coming weeks. De-escalation may indeed be the best step forward.
Indian exports are on fast recovery after COVID-19 led downturn: Goyal
Union Minister of Commerce and Industry Piyush Goyal said on 22nd June that exports from India are on fast recovery after witnessing a sharp downturn due to the COVID-19 crisis. Indian exports fell by 60% in April and by 35% in May. “As of now in June, our exports are down by only 10-12%. So our exports are recovering very fast,” said Goyal while speaking at CII’s 12th Horasis India meeting via video conferencing. He said railway freight movement will recover fully by July.
Stopping China imports may hurt India’s edge, exports: telcos, pharma companies
At a time when a sentiment in favor of boycotting Chinese goods is gathering steam, companies across import-dependent sectors such as automobile, pharmaceuticals, electronics, telecommunications, etc. have said that any move in this direction could be counter-productive and impact the overall competitiveness of the Indian manufacturing sector. They attribute two main reasons for this: one, automobile and pharmaceutical companies have invested deeply in building a supply chain that traces back to China significantly and disrupting that supply chain could adversely affect their competitive situation in the export segments.
Lift ban on exports of PPE kits to boost sales: Apparel exporters
Apparel exporters have expressed concern on the ban imposed on export of PPE kits, stating that the industry is losing business to countries like Pakistan, Vietnam and Bangladesh. According to the Apparel Export Promotion Council (AEPC), Pakistan has received $100 million export orders last week which is likely to go up to $500 million. Bangladesh, too, has, protected its global business from countries such as the US, Nepal, Sri Lanka and Kuwait.
FY21 exports may fall by 10% if there's no second corona wave: FIEO
India’s exports are expected to contract by 10% in 2020-21 with the devastating impact of the coronavirus pandemic slowly receding, and June exports expected to shrink by only 12%, a huge improvement from May’s high 36%, the Federation of Indian Export Organisations (FIEO) has said. However, this calculation also runs the risk of sliding deeper into red if the government pursues a blanket ban on imports from China, FIEO warned at a press conference on 26th June.
Why India must step in as a footwear hub
As India pushes its ‘Vocal for Local’ strategy, the footwear industry believes the country has the potential to reduce reliance on imports and cater to domestic demand by ramping up local production. With the COVID-19 pandemic upending supply chains and businesses across the globe, players believe there is also an opportunity to make a stronger pitch for brand India and Indian-made footwear on the global stage. Harkirat Singh, Managing Director, Aero Club, known for brand Woodland, said: “Certain measures can aid in strengthening the footwear ecosystem. We need to ensure as a country that we focus on quality manufacturing of designs on par with global standards and in line with consumer demand. Efforts towards keeping pricing competitive, while providing value for money, will go a long way, too.”
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