Europe Crisis Casts Shadow Over Exports.

Financial crisis in parts of Europe is affecting de­mand for Indian handicr­afts, apparels, carpets and leather products. It is estimated that there has been a decline of up to 15 per cent in orders from Euro­pe as companies are fina­lising orders for the wi­nter shopping season from October 2011 to February 2012.

“Winter orders from Europe have gone down by 10-15 per cent this time vis-à-vis last year and this is primarily because of the financial slowdown in some parts of the European Un­ion,” said Arvind Vad­era, chairman of the Export Promotion Council for Ha­ndicrafts. “However, a cl­ear picture of any extended impact will emerge only after the shipments are over by the end of August,” he said.

Export orders for winter constitute 60 per cent of the total exports from India across all sectors and, without exception, Germa­ny, France, UK, Italy and Spain are the big markets for these products.

Though Greece and Portugal, the worst affected European countries, acco­unt for only a miniscule po­rtion of the total exports of these items from India, industry experts say the ba­ilout of these countries will reduce purchasing power across the 27-nation bloc.

“Any amount that is pumped to bail out these debt-ridden countries will impact money supply ac­ross Europe. Moreover, th­ere have been cuts in pension and salaries in Spain that, in turn, will affect Christmas purchases this year. Keeping this in mind, European buyers are going slow on placing bulk orders,” said Vijay Mathur, deputy secretary-general of the Apparel Export Promotion Council.

Though demand for Indian products from traditional export sectors from across the globe has risen on average 20 per cent this year, it is expected that if the downturn continues in Europe even orders for the upcoming spring and summer seasons will take a hit.

“While there is no big impact on winter orders for leather goods at this moment, the prevailing uncertainty in Europe is likely to impact orders for next year when buyers stock products for Valentine’s Day and the following months. These orders will start pouring in from August onwards and the process of discussion has already started, though at a very slow pace,” said Raseeque Ahmed, chairman of the Council for Leather Exports.

EU is the biggest market for leather goods from India with 65 per cent contribution to annual exports of $3.4 billion in 2010-11. In carpets, EU’s share is 33 per cent, second only to the United States (38 per cent), while it is 46 per cent in apparels and a little over 20 per cent in handicrafts.

Source : mydigitalfc.com