Deferred orders, slow demand to hurt exporters in Q1

Indian exporters of leather goods, garments and carpets have begun to witness a fall in orders from Europe, requests to push deliveries by a few weeks, and queries related to various restrictions being put in place to control the rapidly rising cases of the Omicron variant of Covid-19 in the country.

Likely manpower crunch, especially in logistics, high freight and restrictions across the globe, could dent India‘s exports in the first quarter of 2022, they said. “Queries have slowed as fear has set in among global buyers. Orders from Europe have slowed down and we expect retail sales to get hit,” said Yogesh Chaudhary, director, Jaipur Rugs.

Buyers in the US, who were earlier asking for earlier delivery of their orders, have delayed it by a few months, Chaudhary said. Exporters said that buyers who had earlier predicted strong demand, are now reforecasting it for the next 2-3 months. India’s exports hit a nine-month low at $30.04 billion in November.

As per Rafeeque Ahmed, chairman of Chennai-based Farida Group, one of India’s largest shoe manufacturers and exporters, and a vendor to Adidas, Clarks, Marks & Spencer, Debenhams and Bally Shoes, among others, clients in the US are inquiring about the various restrictions in India.

“We are running at full capacity now and maybe we can increase production a bit more to prepare for the bad days ahead. Business will get affected once the transport-related restrictions come in place,” Ahmed said.

A Delhi-based exporter of garments expects deferred order flows as many activities are expected to shut down globally in the next few days once client return from their holidays.



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