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As Year 2007 comes to an end, there are talks about India's economic slowdown. It is now felt that exports during the current fiscal will at the most touch $140 billion against the target of $160 billion.
Economists don't lend much credence to this deceleration saying that is not very significant in dollar terms, but when I see it in rupee terms, it is substantial at 5.34 percent during the first half of this fiscal. And the worse-hit sectors are the employment intensive sectors such as textiles, leather, handicrafts and gem and jewellery.
Authorities are harping on the figures of October when export growth bounced back to 35.6 percent in dollar terms and 17.9 percent in rupee terms. But these figures are largely attributed to the execution of past orders.
What we have overlooked is that textile exports fell by 22 percent, handicrafts by 66 percent and leather by nine percent during the month.
Above that, industry sources tell me that millions have lost their jobs on account of exports becoming unprofitable and there are talks that the country may end up losing eight million jobs by March 2008.
Even if we look at the industrial production and its growth, it has declined to 9.2 percent during the first half of current fiscal (April to September) from 11.1 percent in the previous period.
Though it's not yet time to hit the panic button just yet, the fact that export growth has already decelerated can't be denied. Despite signs of slowdown, I still believe that we can overcome these hurdles if we concentrate on alternate markets and take steps to bring down the cost of production of the goods.
Let's hope the New Year will also bring good news for the exim community in terms of profit booking and overcoming these hurdles.
Dear Mr.Khosla,
Your elucidation on the economic slow down have been clearly explained, with rupee terms.
The deceleration is very obvious, the effect of textile, leather, handicrafts and gem and jewellery which are labour oriented has laid out enough man power.
Here at this juncture, your suggestion of reducing the cost of production: will not be applicable immediately with the existing parameter of production and the capital investments in hand.
On the other hand to concentrate on alternate market is advisable. But there will be no immediate effect on improvement in the next three months. It is a process which involves capital investment and increased expenses on marketing.
These are all budgeted in the beginning of the year, hence no chance of further investment during the current year, hence we can conclude no further chance of improvement and we can foresee further deceleration. Unless the government takes any concrete measures.
Dear Mr Khosla,
Well, as an importer of products to Australia [previously exclusively from India] I can well understand the slowdown you may all be seeing now in Indian export trade figures. I for one have only recently directed my attention at other sources of manufacture based on too many unsatisfactory aspects and experiences with India.
I can tell you that the sentiments are echoed in the halls of most everyone I deal with or have attempted to deal with. Indian supply of garments has simply put, been very unreliable.
Quality, floods, weather in general, heat, cold, flu epidemic, fatal car accidents [2 such accidents occurring in a one month period] factory fire in which I am told workers were required to jump from the 2nd floor to save their lives[but don't worry your garments were saved as luck would have it and they will only be 2 weeks later than agreed] collectively resulted in my production being up to 9 weeks late.
[I do not believe these incidents even occurred by the way]. Then there is there is the supplier who claims he is owed money by myself, but who has secretly been seducing my local Australian customers to remove me from the equation and increase his margins.With some he has been successful with others who alerted me to his endeavours he was not.
The same supplier removed an Indian overseer from the equation a year back and now I know why. I have persevered with attempting to perfect my Indian supply for more than 10 years until now. Finally I am beaten. The individuals in India that contrive to climb up and ahead at any collateral cost have won.
I give up. I leave them now to their own devices.So,you must expect that people like myself are actively seeking out new sources. I / we cant condone these sorts of activities which bring your wonderful country's reputation into disrepute.
There are more important aspects to conducting business than just the bottom line. It occurs to me that what is generally missing is an element of trust with those who buy your products.
Free Member, Joined :01/10/2005
No of Topics Posted : 0
Reply/Comments : 6
Dear Mr. Robert, Sorry to hear your experience. But you will be agree that good or bad people exist in each and every country and this kind of people always disrupts countries image all over the world. But I suggest you to explore as there are good people also available.
For your information we are dealing with our Australian buyer since last 30 years and he is quite satisfied with our services today morning only I received a mail form his side that good at business from but bad luck for Crickets, Well jokes apart. I sincerely suggest you to do not give up. All the Best.
Free Member, Joined :10/04/2005
No of Topics Posted : 16
Reply/Comments : 54
In my opinion, the main reason of export decline is rupee getting stronger against dollar. Whether RBI should intervene at this stage or not, is to be decided by the economists of India.
HAMDARD LABORATORIES INDIA
New Delhi, India
Free Member, Joined :06/11/2002
No of Topics Posted : 0
Reply/Comments : 1
The slowdown of exports is largely being attributed to depreciation of dollar and appreciation of Rupee. More than appreciation of Rupee its depreciation of Dollar. It is making exports dearer and clients overseas are shunning away.
What can be the alternative to dollar? The costs of production being same prices are 10% more in international market as compared with last one year. If we go back to basics USA is facing inflation and slowdown and this will further depreciate the dollar. Wasn't the centuries old gold standard better than today's fiat currencies?
In international trade many a times its profitable both for seller and buyer if they can make payments in their own currencies only, but this is not possible. Can the economists suggest some wayout?
When the time shall be ripe enough for making Indian Rupee an acceptable currency in trade between nations. I think the start can be made by bilateral agreements between Indian government and governments of other nations. We don’t have to view USA and Europe only. There is huge trade potential between Asian and African countries.
Just take the Dollar and other currencies out of purview with bilateral agreements, giving validity to Indian Rupee and trading communities of both countries shall stand to gain. Of course government’s back up shall be required. I have studied such a case.
Mahesh
BENTEX INDUSTRIALS PVT. LTD.
Mandi Gobindgarh, India
Paid Member, Joined :03/20/2005
No of Topics Posted : 0
Reply/Comments : 1
Dear Mr Robert,
You know very well that in all the market you can find good and bad people. Some people are doing Business for the sake of BANK turnover to get PC by selling their products at cheaper prices. Even importers are also showing their interest to such a supply through their Agents. This type attitude has to change to maintain consistency in the market.
Rajesh
Free Member, Joined :01/23/2006
No of Topics Posted : 0
Reply/Comments : 1
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