The most affected areas are: apparel, carpets and gems and jewellery, other than software, of course. The US accounts for almost 35 per cent of apparel exports. Garment exporters fear losses of over Rs 2,000 crore if the crisis continues. Gems and jewellery traders have already reduced their export targets by 40 per cent for September and October. Carpet exporters are no more hopeful—their total exports are worth of $550 million, out of which about $220 million go to the US. The industry was hopeful of exports worth more than $100 million in September-October, but now only about $50 million worth of goods will be shipped out.
"The overall growth in exports is going to decline 15 per cent over last year," says O.P. Garg, chairman, northern region, Federation of Indian Export Organisations. Trade analysts feel that even if the US crisis doesn’t worsen the situation, it will surely postpone the recovery many expected.
Almost all Indian exporters with a stake in the US have been told by their American buyers to delay shipments or have received cancellations. "The Japanese market is down, there was already a slowdown in the US and now these attacks. No buyer is coming with new orders and this is the season when fresh bookings are made," says K.K. Jain, president, fieo. R.K. Dhawan, former additional dgft, feels that at this stage imports will be the last priority of the US. "They will now look inwards and try to build their own economy, unless we are exporting essentials that they can’t do without, and that’s not the case, so exports to the US could even come to a virtual standstill."
Even the fate of several trade fairs like the Home Textiles Fair and the annual Trade Fair, planned for the coming months, is uncertain because extensive foreign participation is now doubtful. According to Sunil Sethi, MD, Alliance Merchandising, the retail business in the US is bound to be badly hit and that is worrying exporters. "Even those who have received orders are asking whether they should start production," says Sethi.
Another sector that is badly hit is coffee. Since September 11, coffee trading has virtually come to a standstill. The New York Board of Trade, which decides the benchmark for coffee sales, was located in the wtc. For India, which exports 80 per cent of its total coffee production, the US is a big market, together with Germany, Japan and Italy. And the coming winter months are the peak consumption periods when shipment contracts are firmed up.
Indian exports have been going through a bad phase in the last two years. At 10 per cent of the gdp, they have the potential to add to or subtract from the gdp growth rate. But Q1 exports were worth $10.52 billion, growing only 1.76 per cent. In June, they actually fell by 4.36 per cent to $3.45 billion, pushing down growth expectation for the year to only 8 per cent.
