Federation of Indian Chambers of Commerce and Industry - FICCI has predicted that Indian export industry may not achieve the export target of USD 200-billion due to rising ocean freight rate, rupee depreciation, recession in US and European Market and export restriction in domestic market. This fact comes from a latest survey conducted by FICCI on several export firms.
This fiscal, India has set the target of USD 200-billion, but rising prices in crude oil and global inflation has led India to review the target as the Ocean freight fares have hiked to a very high level and major import countries like US and EU are exploring new export countries, which is going to be prove dangerous for Indian export industries, as survey indicates.
FICCI’s survey has covered 323 export companies from different sectors and geographical areas of India, which annual turn over was ranged from Rs. 1-crore to Rs.20,000 crore.
‘Out of 323 export firms, a hefty 75 percent of the companies feel that the export target of $200 billion for 2008-09 would be missed,’ FICCI stated in a release.
The companies that had participated in this survey belong to automotive, consumer durables, food and food processing, leather, marine products, gems and jewellery, FMCG, textiles, handicrafts, metal and metal products, heavy engineering, IT, pharma and chemicals.
Besides ‘Ocean freight rates’, the survey also revealed that US is also looking for new market sources in Canada, Mexico and other Latin American countries. “If this trend gains momentum then Indian exporters would have to reorient their market strategies and look for markets closer home,” the survey added.
Pointing out behind not to meet the target in this fiscal, the survey said that the sharp increase in the price of oil and oil-based inputs have increased the production cost and transportation cost for raw materials and for finished goods has also increased. ‘That puts the additional pressure on the exporters’ the survey said.
Also the demand in some sectors has also dipped down including mining and minerals. ‘The engineering industry have said that they have seen reduced demand for their products on account of slowdown in the construction industry in US and UK, while textile and IT sector are calculating similar trend in future’, said FICCI survey.
Since, last six months, the currency fluctuation in Rupee has also affected the export sectors, as per survey.
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