Exporters Rush To Deliver Existing Orders Before Aug 27

Chennai: The US-focused export sectors are rushing to push their existing orders ahead of the Aug 27 deadline for the 50 per cent tariff and this will help the August exports still maintain their momentum. However, US buyers across sectors have put new orders on hold.

“The front-loading that was happening prior to the Aug 1 deadline is continuing and exporters are pushing the orders in hand before the August 27 deadline for the oil tariff. However, a lot of new orders which cannot be processed before the deadline are being put on hold by the US buyers. The front-loading will support the August trade, but if the tariffs remain, we will see a steep fall in exports from September,” said Pankaj Chadha, chairman, EEPC.

Of the $20 billion engineering goods exports, sectoral tariffs of 50 per cent on steel, aluminium and derivatives account for $7.5 billion shipments. EEPC expects 10 -15 per cent loss in exports in this category. The remaining $12.5 billion goods, which are subjected to reciprocal tariffs of 50 per cent, will see at least 50 per cent drop in revenues. “Together, we anticipate a $6-7 billion drop in exports, ” he said.

In the textile industry also, exporters are working towards fulfilling orders in hand prior to the August 27 deadline. “However, several buyers have said that they were keeping the new orders on hold for the time being and would come back to us later after having a clarity on the oil tariffs. Some of the exporters who have brought the fabric have asked the workers to stop cutting it,” said A Shaktivel, vice-chairman of Apparel Export Promotion Council. The US is a leading buyer of Indian apparels, while a large share of India’s home textiles go to the US.

In the gems and jewellery sector, however, there is not much rush to fulfill orders. “There is no hurry in the sector as the demand itself has been low. We are finishing the processing of the existing stock, and the units are working for the time being. We work on small margins and hence even 25 per cent tariff is big for us. The industry has 35-40 per cent dependence on the US market. The units will have to stop working in two to three months,” said Vipul Shah, former chairman, GJEPC. The US is the largest market for India’s cut and polished diamonds and studded jewellery.