Namrata Kath Hazarika | 21 Apr, 2010
Already
exporters are not able to draw enough demand for goods from the key export
markets due to the massive financial slowdown, which have hurt many big
economies adversely in the last one year. In addition, the unprecedented
four-day shutdown of European airspace continued to wreak havoc, as the volcano
near the Eyjafjallajoekull glacier in southern Iceland went on spewing ash and
many countries have either canceled, delayed or extended bans on flights.
And, this has undoubtedly made Indian exporters feel jittery about the huge
loss they (exporters) would be witnessing in the next few days. Underscoring
views in this context, S.P.Agarwal, President of Delhi Exporters Association
(DAE) commented that the situation has added 'fuel to the fire.' And,
the exporters are going to witness a loss of Rs. 1000 crores from all over the
country.
"It is a hard time for exporters once again after the incident at ICD
Tughlakabad which made exporters to suffer huge loss due to the massive
fire which broke out recently," Agarwal said.
Explaining further, he mentioned that the Indian exports have started
recovering slightly after the impact of the worst global slowdown, but all of sudden there has been the airport strike in Europe which has been another trouble for the exporters as quantum of goods got accommodated which
resulted in the congestion of air cargo.
He added, "During this period, airlines are quoting 50 percent higher
price for cargo. Like, if they (airline) were charging fair Rs. 200 a kilo,
they have started charging at around Rs.300 to 400 a kilo, which is costlier
for the exporters. They were blackmailing the exporters by charging more.
Moreover, the cargo did not get exported to their respected destination."
Moreover, the cloud of volcanic ash has made things worst for the exporters as
the entire movement of goods have got stranded, he said.
He pointed out that around 1500 shipping bills are passed for export shipments
from all over the country via air. However, around 10,000 export shipments
bills are filed every day and the amount for five days becomes 50,000 from all
across the country.
At present, there is no sign when the ash clouds will clear and everything is
at halt. Moreover, buyers are expected to cancel orders if the situation
prolongs and the exporters can likely witness great financial crisis with the
strand of shipments, delay and undelivered goods, Agarwal mentioned.
The chairman of the Indian Silk Promotion Export Promotion Council, Subhash
Mittal is also expecting 10-15 percent slowdown in business, if the situation
continues for another couple of days.
He said that if the the air travel crisis continues for more time, Indian
exporters can witness cancellation of orders from the buyers, as they (buyers)
will not appreciate to stay in an indefinite circumstances, which might hit
Indian exports in future.
Agarwal expects that these losses will take another one month to get over, making exporters face huge financial loss.
The Federation of Indian Export Organizations (FIEO) expects that worth $1
billion high-end merchandise exports from India are probably get affected due to
the air travel crisis.
It quoted that exports worth $10 billion are shipped annually by air via
European air routes and consignments
worth $1 billion is exported monthly to EU. If the situation prolongs then
exporters will be hit in a big way and make things worst for them.
Mittal said that many airlines have already increased their freight charges,
which has become hassle for Indian exporters as of now. Few airlines are
demanding exorbitant freight charges. Stating this he said, "Freight costs
have almost doubled for America and Europe. They are charging express rate,
normal rate and some are also charging the basic rate, etc. However, middle
east is not charging the express rate. But the backlog is too much at present."
"As consignments have been stranded, there is massive delay in the
delivery process. Buyers are co-operating, but the chances are more for
canceling the shipments or they (buyers) may request for discounts. We are
going to witness a huge loss, if the situation continues," he added.
In fact, airports of all sizes in Ireland, the UK, Belgium, the Netherlands,
Norway, Sweden, Denmark, Estonia, Latvia, Finland and parts of France, Germany
and Poland have been directly affected. According to the statement of the Airports Council International (ACI) Europe,
around 63000 flights have been canceled so far along with 313 airports have
been paralyzed and the situation is worst then 9/11 attack.
Moreover, many Indian airlines such as Kingfisher, Air India, Jet Airways
including all others have canceled/ banned their flights to Europe and many have extended
the delay and bans on flights.