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    Exports likely to be positive only by end of Q2, say exporters

    Exports likely to be positive only by end of Q2, say exporters

    Exports likely to be positive only by end of Q2, say exporters
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    By Rituparna Bhuyan   IST (Published)

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    Overseas shipment of goods from India’s factories are likely to be in negative territory till October, exporters told CNBC-TV18. Exports from the country crashed 60 percent in April to $ 10.36 billion, the lowest in almost three decades. Ajay Sahai, CEO of Federation of Indian Export Organisations however said manufacturing activity in select export related sectors have picked up.

    Overseas shipment of goods from India’s factories are likely to be in negative territory till October, exporters told CNBC-TV18, even as they are getting enquiries from potential foreign buyers. Exports from the country crashed 60 percent in April to $ 10.36 billion, the lowest in almost three decades.
    “Going by the feedback of our members, we expect contraction in exports to continue till at least October,” said Ajay Sahai, CEO of Federation of Indian Export Organisations, an umbrella body of exporters supported by Ministry of Commerce.
    He however said manufacturing activity in select export related sectors have picked up.
    “We estimate that May will be better than April, but still 30-40 percent down over last year. By July, contraction in exports could be closer to 20 percent. Pharma, plastics, chemicals and some segments of engineering and electronics are better off compared to traditional sectors like apparels, carpets, handicrafts and leather,” Sahai added .
    Apparel companies which contribute nearly 10 percent to India’s export basket share that view.
    “We expect at least 50 percent annual contraction in May apparel Exports,” said A Sakthivel, Chairman, Apparel Export Promotion Council, adding that it could be positive by the end of September-October buying season by overseas clients.
    Engineering exporters also see May exports falling 50 to 70 percent. The sector accounts for nearly one-fifth of India’s exports.
    “Most engineering MSMEs restarted their factories in second week of May,” said Ravi Sehgal, Chairman, Engineering Export Promotion Council, adding that the second quarter will be crucial as it is the peak season for orders. “There are several pending issues related to the sector. Labour availability is a big problem,public transport is still a big issue in many states,” he said.
    With exports crashing amidst a global pandemic in the first half of the year, Indian exporters are pinning their hope on new buyer enquiries that have started to pour in from foreign clients.
    “Many foreign buyers want to explore India as an alternate sourcing destination to protect their value chains. The number of enquiries from US, Australia and EU have surged. Hope this leads to more orders in the coming months,” Sahai said.
    Apparel exporters maintain that they are starting to get orders for samples. “Usually, such orders for samples translate into export orders,” Sakthivel said.
    According to Sehgal, Logistics and labour related issues needs to be sorted out immediately for engineering exports to return to positive territory by end of September. “One fourth of engineering MSMEs are functional. Another one fourth is getting ready. But half of our members are still cleaning up factories and yet to get ready,” Sehgal said.
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