Indian exporters are feeling optimistic as order inflows across key sectors like textiles, apparel, and leather have seen a significant rise in April, the first month of the new fiscal year 2024-25.
This comes after exports witnessed a 3.1% annual decline in the previous fiscal year 2023-24.
“Sectors like textiles, apparel, and leather are reporting an increase in orders, which points to a healthy first quarter,” said Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), reported FE. Official export figures for April have not yet been released by the commerce ministry.
One factor expected to boost exports in the coming months is the shipment of orders booked in March but delayed due to disruptions in global shipping caused by the Red Sea crisis and developments in the Middle East.
Transit times have increased by 30 per cent, and container shipping capacity has dropped by 9 per cent as cargo vessels avoid the Suez Canal and instead detour around the Cape of Good Hope after Houthi rebels in Yemen began attacking merchant ships.
The experience of Indian exporters aligns with forecasts from the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD), which predicted a revival in world trade volumes by 2.6 per cent in 2024 after a 1.2 per cent contraction in 2023.
In the previous fiscal year 2023-24, India recorded a 3.1 per cent decline in exports to USD 437 billion, with the April-June quarter being the toughest, seeing a 6.3 per cent decline. This low base effect could also contribute to improved export numbers this year.
The engineering sector, which contributes 25 per cent to total exports, is also reporting order inflows above last year’s levels. “April is traditionally a slow month after a rush in March, and order flow is by and large sustaining at least year’s pace,” said Arun Kumar Garidia, Chairman of the Engineering Export Promotion Council (EEPC).
While the export sector has weathered global headwinds and geopolitical tensions well in the previous fiscal year, concerns remain if the situation in the Middle East escalates further, according to Sahai.