PHD Chamber Survey :80 % exporters face drop in order size

According to a PHD Chamber survey, 80% of respondents have seen a drop in order size and volume over the last year and 20% respondents have not seen a drop in order size .This was revealed by a survey done by PHD Chamber of Commerce. Further 60 % of respondents said that delay in payments was not affecting them. Only 40 % of respondents felt that delay in payments was affecting their business.

About 76% respondents said that there has been a marked drop in order size over the last quarter (Oct-Dec). 78 % of respondents which have seen a marked drop in order size have witnessed a drop of 30-40 % in volume of exports and 21 % have seen a fall of more than 50 %.   These are the findings of a survey on , “Effect of Global Slowdown on India’s Foreign Trade” done recently with a sample size of 104 mainly covering industries like textiles and handicrafts, wood and furniture, home furnishings, garments and carpets.

The badly affected export industries are eagerly looking for government to initiate steps  like  provide special packages to boost and promote exports, reduce rate of Interest and excise duty, uniform VAT in all the States, Income Tax rebate on exports, relaxation on import of raw materials, increased  duty draw back and reduced transportation costs.

The major markets where the drop in orders are Europe, U.S. and Latin America. 

The exporters are handling this changed scenario by following an alternate strategy of moving to other newer markets and also developing demand in local markets. 

The textiles and handicrafts industry has witnessed a drop in demand of 30-40 % over the last year.

Carpets industry has seen a drop of 50-60 % over the last year, with the major markets being affected are Europe and U.S.

The ready made garments sector saw a drop of 40-45 % in demand over the last year and wants the Government to increase the percentage of duty drawback. Along with the global crisis, the reasons for fall in volume of exports were that buyers wanted less lead time and were buying nearer the season.  

The electrical machinery sector where the major markets were Middle East, South & South East Asia, CIS countries and Africa, the reasons for fall in volume if exports were  global economic meltdown, crude oil dipping and drying up of liquidity in the financial system. The preferred strategy of exporters to maintain the growth momentum in electrical machinery would be to focus on project exports, search for new markets, long term rate contracts with key customers, providing financing support through GOI line of credit and EXIM banks buyers credit.

The industry wants the government to provide export incentives like re-introduction of target plus schemes, availability of DEPB Schemes for project exports, reimbursement of indirect cost due to country specific constraints, provide greater support with enhanced line of credit facilities, provide competitive long term financing.

The industries covered in this survey by PHD Chamber were mainly in MSME sector.

Anjula Singh Solanky
Dy. Secretary-Media Relations
PHD Chamber of Commerce and Industry