Export Promotion Councils across the country have warned of a historic contraction In India’s exports during April, 2020 when most factories were shut and logistics activity minimal because of the nationwide lockdown. Labour intensive exports are likely to report the worst ever dip as customers cancelled orders for shoes, apparel, machine parts, jewellery and carpets.

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“We are expecting at least a 50 percent contraction in merchandise exports in April 2020," said Ajay Sahai, Director General and CEO of Federation of Indian Export Organisations (FIEO), an umbrella body of Indian exporters.

"Very few export units functioned and most overseas shipments during the month were of export consignments from the previous month,” he said

India’s exports stood at $21.41 billion in March 2020, down roughly 35 percent over the previous year.

The real impact of the April lockdown on exports will be known on May 15 when India’s trade ministry releases the data on trade for the month. While the government has extended the lockdown till May 17, it has allowed limited economic activity since May 1 with minimal presence of workers in manufacturing units located outside containment zones.

Apparel exporters said there was minimal or no activity in factories producing readymade garments, woollen knitwear, and other fabric items due to the lockdown.

To make matters worse, design houses and buyers in top overseas markets like Italy, Spain and US cancelled orders.

“At best, we expect exports of Rs 200 crore in April 2020 as against Rs 9786 crore worth of exports in the same month a year ago,” said A Sakthivel , Chairman of Apparel Exports Promotion Council, with over 8000 exporter members. In year on year terms, that would be a dip of nearly 98% in apparel exports from India during April.

Leather exporters did not fare any better.

“Almost all our members were shut in April. Some consignments of previous orders may have been shipped but volumes are minuscule. As our primary overseas customers are in a lockdown, we expect exports of about $ 16 million,” PR Aqeel Ahmed, Chairman of Council For Leather Exports told CNBC-TV18. That is a fraction of the $ 391 million leather exports seen in April last year.

With the lockdown norms being eased in May, Ahmed expects leather exports to increase to nearly $94 million, but that would still be one-fifth of the numbers seen in May last year.

Engineering goods, the bulkwark of India's exports, too has taken a pounding. On average, goods like auto and auto components, machinery and metal scaffolding comprise nearly one-fourth of the county’s export basket. “We estimate an overall drop of 50 to 60 percent in April ,” said Ravi Sehgal, chairman of Engineering Export Promotion Council.

Pharma exports, which earned between $1.5 to $1.8 billion every month in FY20, could fare slightly than the rest of the pack. “Thanks to air cargo flights, exporters were able to ship out consignments to select countries in the second half of April. But exports through sea route have been minimal. We estimate a sharp annual fall in pharma exports during April,” said Dinesh Dua, chairman of Pharmexcil, a body comprising exporters of drugs. “Due to sharp demand in overseas countries, pharma exports from India has the potential to reach up to $ 2 billion every month but units need to fully functional for that,” he added

First Published:May 12, 2020 11:06 AM IST