Post the coronavirus outbreak, the country’s export sector has been under threat, with many factories set to face huge losses. Not only are orders limited, the factories are unable to work with workers unable to report for work due to lockdown. This means, these factories are in no position to fulfil orders on time, whereas fixed costs have to be taken care of, irrespective of the situation. Therefore, job losses seem inevitable unless some action is taken fast.
It is reported that more than half the orders have been cancelled and the future doesn’t look too bright. About 15 million workers may be rendered jobless. Also, with the non-performing assets (NPAs) increasing amongst the export factories, the impact on the economy is going to be rather disastrous.
Sharad Kumar Saraf, president, Federation of Indian Export Organisations (FIEO), has sought timely action to prevent further damage to the sector. According to him, relief measures are needed immediately or else it will be a huge challenge for the export sector to recover. He has sought permission for all export units to continue their manufacturing activities with minimum workforce, as long as they offer sanitisation facilities, take safety measures and also maintain social distancing.
Saraf has also suggested that exporters be offered interest-free working capital term loans, so that they are able to bear the burden of the costs incurred in paying wages, rent and maintaining other facilities and infrastructure.