Exporters keeping fingers crossed as recession clouds loom over EU

He, however, added that the situation in the EU provides an opportunity for Indian exporters to enhance efforts to boost exports to countries like Russia.

"Sanction of Russia gives us an opportunity to tap that market," Sahai said, expressing confidence that India’s total merchandise exports would reach USD 470 billion in 2022-23 as against USD 420 billion in 2021-22.

Biswajit Dhar, a professor of economics at Jawaharlal Nehru University, said the government should rework its strategy on the export front as the EU situation is not good.

"It is not just an energy crisis, it is a larger problem of slowing down of the economies in EU countries. That should be a source of concern for us. If major markets like the EU face such recessionary tendencies, our exports could actually suffer," Dhar said.

Sharing similar views, Technocraft Industries founder and chairman Sharad Kumar Saraf said EU buyers are cancelling orders and it would affect the country’s exports in the coming months.

"Situation is not good at the export front, particularly for sectors such as textiles and chemicals," he added.

Ludhiana Hand Tools Association President S C Ralhan said EU buyers are delaying accepting consignments, so exporters are a bit worried about the situation there. India’s exports to the EU stood at USD 30.8 billion during April-August 2022.

It was USD 65 billion in 2021-22. Commerce and Industry Minister Piyush Goyal held meetings with exporters on October 7 to discuss ways to promote growth of exports.

He has stated that India must keep prospecting for new opportunities in the world market and utilise all such possible chances to expand trade. In the meeting, industry has flagged certain issues related to the rising cost of raw materials and subdued demand in certain key export markets due to high inventory levels.

The industry requested inclusion of left out sectors under RoDTEP (Remissions of Duties and Taxes on Exported Products) and rationalisation of existing RoDTEP rates, exploring possibility for increased support under Interest Equalisation Scheme and Market Access Initiative (MAI).

A decline in exports of sectors such as engineering, ready-made garments and rice led to a contraction in the country’s overall outbound shipments by 3.52 percent to USD 32.62 billion in September, while the trade deficit widened to USD 26.72 billion, according to the preliminary data of the commerce ministry.

The Russia-Ukraine war is severely affecting global supply chains. Russia has also slashed the flow of natural gas to Europe.