The Federation of Indian Export Organisations (FIEO) expects India’s exports to decline by around 10 per cent in the current fiscal. But in case of a second coronavirus wave, the contraction may reach 20 per cent, it anticipates. FIEO is receiving a lot of enquiries from countries where anti-China sentiments are high and many of these enquiries have been converted into orders.
However, the demand in employment-intensive sectors like gems & jewellery, apparels, footwear, handicrafts and carpets is still a challenge, FIEO said.
The export recovery is likely to be led by pharmaceuticals, medical and diagnostic equipment, technical textiles, agri and processed foods, plastics, chemicals and electronics. As the domestic demand for petroleum products is extremely low, India may witness increasing exports of petroleum as well for such companies to sustain in business, said FIEO in a press release.
FIEO suggested its members to look into a three-pronged strategy: focus on countries like the United States and the United Kingdom that are providing demand stimulus; explore countries having high anti-China sentiments, including European Union nations, the United States, Japan, South Korea, Australia, New Zealand and Canada; and revisit economies depending on crude and commodities exports as prices of such products are likely to be subdued.
The federation urged the government to provide an ecosystem that addresses the cost disability of Indian manufacturing. Import substitution manufacturing should attract interest subvention on credit, offsetting inland freight disadvantage besides equalisation of import tariff from free trade areas.