Hand tool exports to grow 17% in Punjab

Punjab, which contributes 90 per cent of hand tool exports, is expected to achieve a growth rate of 17 per cent in 2005-06.

But experts in the industry believe the growth rate would hover between 20 and 25 per cent, if the VAT related issues, rise in steel prices, power problems, VAT on DEPB(Duty Entitlement Pass Book Scheme) etc., could not crippled the production, as most of the time exporters ran from one office to another to get their settlement done and ultimately led to decline in exports.

The Hand tools exports from all over India, in 2004-05, was Rs 760.41 crore, while it was Rs 629.06 crore during 2003-04. Thus, the overall growth rate was about 21 per cent, last year. While this year, even in case of whole India, the growth rate is expected to touch 17 per cent only.

Also, so far overall exports of engineering goods is concerned, Punjab contributes about Rs 12,000 crore. Last year, 2004-05, the total export of engineering goods from India was to the tune of Rs 71,414.75 crore.

While in financial year 2003-04, it was Rs 52, 949.13 crore, with an overall growth of about 35 per cent, last year, this year the total growth rate of India as well as Punjab would be 17 per cent only.

Talking to Business Standard, Opinder Singh, assistant director, Engineering Export Promotion Council said, "The growth of cycle industry, hand tools and garden tools are not encouraging as compared to previous year. But on the contrary Auto Ancillary units, agricultural equipment's, tractor & its parts and forging sector are doing quit well.

But now the Europeans are eying India for imports. As compared with China, the quality is much better. Even bigger companies like Graingers, Chicago based, dealing in hand tools, having 150 stores in America are eyeing on India, as their representative visited Jalandhar to outsource hand tools last month.

While another exporter lamented that high vat and steel rate as well as high and power cuts added the input cost and further led to decline in exports.

Highlighting the bottlenecks in Punjab, he added that firstly, the industry have locational disadvantage, as the entrepreneurs have to shell out extra bucks towards freight charges.

However, government of Punjab had facilitated the export frieght subsidy to the exporters for frieght from Dry port to Sea port. This facility was given to exporters to compete with other status that are having sea ports near them. But present there is huge freight subsidy pending for credit in exporter's account. Moreover the electricity cost is higher.