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"Is anyone listening? We are in panic here," said Mecca Rafeeque Ahmad, a Chennai-based leather goods exporter who owns the Farida Group. Also president of the Council of Leather Exports, Ahmad had to shut down one of his manufacturing units to cut costs.
"We have no idea where things are heading for. Everyone is silent. I had to close down one of my factories because there is no demand for finished leather goods. By this time we generally start shipping Christmas and New Year orders. But this year we are seeing a decline of 15-20 per cent in our order books. Large-scale job losses are inevitable," said Ahmad, a former president of the Federation of Indian Export Organisations (FIEO).
Leather exports in the first quarter of this financial year declined by almost five per cent from those in April-June 2014. Finished leather goods account for 21 per cent of the total leather exports from India. China and the European Union are the biggest markets.
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In the first quarter of 2015-16, India's merchandise exports contracted 16.75 per cent to $66.69 billion, from $80.11 billion in the same period of 2014-15. Exports have fallen for seven months in a row.
The situation is equally grim for other export-oriented labour-intensive industries, such as textiles, gems & jewellery, and handicraft. Even star export houses in the textiles sector are feeling the pinch.
"We have lost competitiveness to duty-free low-cost countries like Bangladesh and Vietnam. Even in the worst of recessions, we have not faced such competition. They are taking basic business away from us. Nobody is in love with India. Buyers will go where they can buy cheap," said Sudhir Dhingra, chairman & managing director of apparel maker Orient Craft, which supplies to retail conglomerates JC Penney and Walmart.
D K Nair, secretary-general of the Confederation of Indian Textile Industry (CITI), believes the condition of forward contracts has gone from "bad to worse".
"Export of fabric and yarn is down, owing to a slowdown in China. It is the biggest market for Indian yarn and we are adversely affected. The condition of the European economy is not conducive, either. We expect the second quarter to be as bad as the first. If the rupee strengthens, it will be a double whammy. Exports in the whole of this year are going to be bad," Nair said.
However, he added, garment shipments were still seeing some growth due to demand in the US and diversification into non-traditional markets.
The gems & jewellery industry is expecting a fall of 20 per cent in fresh export orders. "Compared to last year, export sales this year are down by 15-20 per cent, mainly due to volatility in the currency, and a complete lack of demand," said Vipul Shah, chairman, Gems & Jewellery Export Promotion Council, and CEO of Asian Star, a Mumbai-based company.
