Coronavirus Impact: Exports Sector May Face 1.5 Crore Job Losses, Rise In Bad Loans, Says FIEO
About 1.5 crore people face job losses in India's export sector following the cancellation of over half of the orders and a gloomy forecast for global trade due to the Covid-19 pandemic, exporters' body Federation of Indian Export Organisations said on Friday.
Seeking immediate announcement of a relief package for exports, FIEO President Sharad Kumar Saraf said a fine balancing is required between life and livelihood, as opting for only one can be disastrous for the country.
He said that exporters are left with "very" few orders and if factories are not allowed to work with a minimum workforce, many of them will suffer "irreparable losses" which will bring them to the brink of closure as they are saddled with a fixed cost that in any case has to be absorbed by them.
"With the cancellation of over 50 percent of orders and a gloomy forecast for the future, we expect 1.5 crore job losses in exports and rising non-performing assets amongst exporting units, hitting the economy very badly," Saraf said. He added that sectors including apparel, gems, and jewellery, leather, handicrafts, engineering and textiles are severely hit by the lockdown.
We are losing markets to China. All orders are going to China as they have resumed work. It will be very late if we will not start our factories now. Small economies like Bangladesh and Sri Lanka to have announced relief packages.SK Saraf, President, FIEO
Saraf added that any further delay in rolling out of incentives would be "catastrophic".
He recommended steps like interest-free working capital term loans to exporters to cover the cost of wages, rental, and utilities; employee provident funds and Employees' State Insurance Corporation's waiver for three months from March to May; extension of pre and post-shipment credit by 90-180 days on their maturity, and extension of interest subsidy benefits.
"Huge support given by various economies to exports will put Indian exports in further difficulties as when the size of the cake reduces, competition intensifies with focus on prices," he added.