New Delhi: Due to “visible” recessionary trends in the European Union (EU), exporters are crossing their fingers since they may have an impact on the demand for local goods in that market in the upcoming months.
One of the main export markets for Indian companies is the EU, which receives around 15% of all of India’s exports.
“There are visible symptoms of recession in the EU. Energy crisis is looming there. Buyers are delaying orders from India. They are concerned but hopeful,” Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said.
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However, he went on to say that the situation in the EU gives Indian exporters a chance to step up their efforts to increase exports to nations like Russia.
“Sanction of Russia gives us an opportunity to tap that market,” Sahai said, expressing confidence that India’s total merchandise exports would reach USD 470 billion in 2022-23 as against USD 420 billion in 2021-22.
The government should reconsider its export strategy, according to Biswajit Dhar, a professor of economics at Jawaharlal Nehru University, because of the unfavourable scenario in the EU.
“It is not just an energy crisis, it is a larger problem of slowing down of the economies in EU countries. That should be a source of concern for us. If major markets like the EU face such recessionary tendencies, our exports could actually suffer,” Dhar said.
Sharad Kumar Saraf, the founder and chairman of Technocraft Industries, had similar opinions, claiming that EU purchasers are cancelling orders, which will have an impact on the nation’s exports in the coming months.
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“Situation is not good at the export front, particularly for sectors such as textiles and chemicals,” he added.
Exporters are a little concerned about the situation in the EU, according to S C Ralhan, president of the Ludhiana Hand Tools Association. EU buyers are postponing accepting consignments, he said.
Between April and August 2022, India’s exports to the EU totaled 30.8 billion USD. In 2021–2022, it was USD 65 billion.
On October 7, Piyush Goyal, the minister of commerce and industry, met with exporters to discuss strategies for fostering export growth.
He has said that India must continue to look for fresh opportunities on the global market and take advantage of all available options to increase trade.
Industry representatives raised a number of concerns at the conference, including the growing cost of raw materials and the weak demand in several important export markets as a result of high inventory levels.
According to preliminary figures from the commerce ministry, a drop in exports of engineering, ready-made garments, and rice reduced the country’s overall outbound shipments by 3.52 percent to USD 32.62 billion in September, while the trade deficit extended to USD 26.72 billion.
Global supply chains are being seriously impacted by the Russia-Ukraine conflict. Russian natural gas exports to Europe have also decreased.
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