NEW DELHI: Exports have come out of the red in November after 13 straight months of decline, but exporters from key sectors would like to watch for a couple of months more as they feel the recent improvement could be due to festive buying.
“If there is a lot of retail selling in December, especially in the last week, showcases and counters of shops would get empty and it would then result in high orders in the following months,” said Vasant Mehta of the gems & jewellery export promotion council.
The gems & jewellery sector, which employs close to 1.5 million people and was severely affected by the global slowdown, attributes the 40% increase in exports in November 2009 to an improvement in buyers’ sentiments.
“Last Christmas and new year season, buyers’ sentiments were very low and it got reflected in the low purchases made,” said Vasant Mehta, from the gems & jewellery export promotion council.
Engineering goods, one of India’s highest growing export sector, witnessed orders plummeting in the fiscal 2009-10 due to orders shrinking in the EU and the US markets.
Since there is a three-six months lag between placement of orders and delivery, the sector managed to post a growth of 25$ in fiscal 2008-09.
“The enquiries are definitley growing,” said Aman Chadha, an engineering goods exporter and national chairman of the engineering goods export promotion council. One has to see if it translates into greater orders in the last quarter of the fiscal, he added.
“Whether the feel-good is sustainable or not will be clear only in the coming months,” he said.
The textile sector, where thousands of workers were laid off over the past one year due to a sharp fall in orders from the Western market, too, has started seeing a turnaround. But it has a peculiar problem.
“The orders have started coming, but the prices being offered are very low,” said DK Nair from the confederation of Indian textile industries.
There has been recovery in countries like Germany, Italy and France and buyers there had started placing orders, he added. But Indian exporters were finding it difficult to meet the low prices they were demanding.
“Competing countries including Bangladesh, Vietnam and China are offering big incentives to their textile industry which is helping them to keep their prices low,” Mr Nair said.
He said that the next couple of months would be crucial as it would reveal how Indian textile exporters have been able to cope with the situation of depressed prices.
India’s exports posted a 18.2% growth in November 2009 to $13.2 billion. In the April-November 2009 period, export growth is a negative 22.3% at $134.2 billion.
Encouraged by the positive growth in November, commerce and industry minister Anand Sharma had said that exports would get back on the growth track in the next fiscal and post a 15% increase over exports in the current fiscal.
Source : The Economic Times