x Abu Dhabi, UAESaturday 22 July 2017

Indian exporters may cut 10 million jobs

India's textiles, gems and jewellery, handicraft and engineering sectors could each see job losses of more than one million, according to FIEO's analysis.

Indian exporters expect to lay off 10 million workers by March as recession-hit buyers in the US, Europe and Asia cancel orders. "The year is going to be the worst in history," said A Sakthivel, the incoming president of the Federation of Indian Export Organisations (FIEO) yesterday in New Delhi. "Exporters don't have orders beyond January and if the present trend continues, there will be approximately 10 million job losses." India's textiles, gems and jewellery, handicraft and engineering sectors could each see job losses of more than one million, according to FIEO's analysis. Mr Sakthivel said customers were rapidly cutting back on purchases. "Fresh orders are drying up due to lower demand, buyers are cancelling earlier orders or re-scheduling shipments. Buyers are asking to reduce prices even for already executed contracts, and asking to match 'China prices'," he said. DK Nair, secretary general of the Confederation of Indian Textile Industry, said the textile industry had never experienced a slump of the present intensity. "Industrialisation in India only happened 60 years back, so we haven't faced this kind of situation at any time in the past. This financial year I expect about one million jobs to be lost in the textile industry, out of 35 million." Pramod Agarwal, the chairman of Derewala Jewellery Industries, said the city of Jaipur, the hub of India's jewellery industry, was braced for a severe post-Christmas crunch. "We only come to know the projections of all the companies after Jan 20, when they see how much they sold at Christmas time. The signs are not very good. What I heard was drops of 40 per cent to 50 per cent." He said the city's jewellery manufacturers had been laying off staff gradually for more than six months, but he had so far kept his 900 workers. "I haven't released anybody so far, and I am trying as hard as possible to keep them. But it is very hard... As well as making money I try to make jobs." The leather industry is also braced for deepening problems. "We are fearing for the future. Retail sales are bad, so we expect cut backs in ordering," said Habib Hussein, the -chairman of the Council of Leather Exporters. India's exporters have cut about 65,000 jobs since exports began falling in October, which brought seven years of consecutive growth to an end. According to a survey by ABN Amro, output from India's factories and utilities continued to fall last month. India's growth has fallen below the 9 per cent rate it has enjoyed over the past few years, but many economists still believe that because India relies on exports for only 20 per cent of GDP, its annual growth rate will remain above 7 per cent. Mr Sakthivel visited India's Commerce Ministry yesterday to lobby for greater help for exporters, who complain that recent measures to stimulate the economy gave nothing to exporters. The stimulus package, India's second, injected more capital into the country's banks and allowed foreign investors to buy more debt. Exporters say India has not kept in step with the export incentives offered to Chinese companies. FIEO wants the government to increase refunds given to exporters on duties paid on raw materials and value added tax, and also called for a five-year income tax holiday. business@thenational.ae