Low demand in international markets starts hitting Indian exporters

7 Jul 2022 , 08:42 AM

As stockpiles build up in major export destinations due to sluggish demand, order books of Indian exporters have started to contract. For leather and footwear, order books have declined by 15-20%, while for yarn, volumes have dropped dramatically by 70%.

The take-off of cotton yarn, ready-made clothing, leather goods, and handicrafts was hampered by high inflation in the US and the EU, which had an effect on the rate of India’s exports in June, which climbed 16.8% on year at $37.9 billion, less quickly than 20.5% in May.
In June, exports of yarn, fabric, made-ups, and handloom items fell by 22.54%.

Orders for ready-made clothing have been delayed due to slow retail sales in the US and the EU, and yarn exports have completely stopped, according to exporters.

According to industry representatives, future price compression will also result from the strain on order books brought on by decreased demand.

While the effect on industrial exports is anticipated to take time to materialize, analysts claimed that the war in Russia and Ukraine has had a negative knock-on effect on exports of engineering goods, which fell 1.57% annually in June to $9.14 billion from $9.29 billion in June 2021.