Labour woes: Firms worry even as export queries rise

Exporters have seen a 20% rise in export enquiries in the last fortnight from the US, Australia and Japan. While cotton yarn is being exported at a 15-20% discount especially to China, exporters of handicraft, jewellery and shoes have got significant enquiries from the EU.

However, labour-intensive sectors such as gems and jewellery are apprehensive about the sharp rise in orders as they grapple with rising labour costs amid social distancing norms.

The 13th edition of Indian Fashion Jewellery & Accessories Fair, which was organised by the Export Promotion Council of Handicrafts (EPCH) as a virtual fair from June 1-4, saw around 1,200 overseas buyers from 81 countries.


“Serious enquiries worth ₹150 crore were generated, which are likely to convert to deals,” said Rakesh Kumar, EPCH director general.

Cancellation of orders had resulted in merchandise exports contracting 60% from a year earlier to $10.36 billion in April. The government expects the contraction in exports in May to be 30-35%.

Commerce and industry minister Piyush Goyal recently said that exports in June could be on a par with June 2019 or 8-10% less.

“Exploratory enquiries are happening and there is almost a 20% rise in them in the last few weeks with the US, Australia and Japan contributing the most,” said Ajay Sahai, director general, Federation of Indian Export Organisations.

Sanjay Jain, chairman of ICC National Expert Committee on Textiles, said yarn exports are happening but at 15% lower rates than in the pre-Covid-19 days. “China is buying from India and there are inquiries from the EU and Bangladesh. Cotton prices have fallen and the old orders, which got cancelled, have now been renegotiated,” Jain said.

The anti-China factor is also aiding the higher number of enquiries with exporters terming the ongoing Covid-19 crisis as an opportunity to promote India.

“The US and EU have are reactivated their orders as they look at alternate sourcing destinations. However, not much new business has come in,” said Council for Leather Exports chairman Aqeel Ahmed Panaruna.