Exporters’ Order Books Begin To Shrink Due To Low Demand


Order books of Indian exporters have begun shrinking as inventories pile up in key export destinations on low demand. Order books have shrunk 15-20% for leather and footwear, while in yarn, volumes have witnessed a sharp 70% fall.

High inflation in the US and the EU slowed take off for cotton yarn, ready-made garments, leather goods and handicrafts, impacting the pace of India’s exports in June, which rose 16.8% on-year at US$ 37.9 billion, slower than 20.5% in May.

“Clients in the US are doing cautious buying as their budgets are tight due to high interest rates. While orders had increased in the last two years, we expect a 15-20% decline now,” said Rafeeque Ahmed, Chairman of Farida Group, one of India’s largest shoe manufacturers and exporters, which is a vendor to overseas firms such as Adidas, Clarks, Marks & Spencer, Debenhams and Bally Shoes.

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Exports of yarn, fabric, madeups and handloom products have shrunk 22.54% in June.

Slow retail sales in the US and the EU have delayed the orders for readymade garments while yarn exports have come to a standstill, exporters said. Industry representatives said that the pressure on order books due to lower demand will also compress prices in the future.

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According to Rakesh Kumar, Director General, Export Promotion Council for Handicrafts, overbuying has happened in the US and the EU because of clubbing of containers at the buyers’ ports earlier this year. “There are excess quantities and orders are slow but we expect them to recover in the coming quarters. Demand from Eastern Europe, Latin America and Middle East is likely and the FTAs with the UAE and Australia will benefit us,” Kumar said.

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