Financial crisis in European nations is affecting the labour intensive exports in India like; handicrafts, apparels, carpets and leather, reports media. It is estimated that there has been a decline of up to 15 percent in orders from Europe as companies are finalising orders for the winter shopping season from October 2011 to February 2012.
Export orders for winter constitute 60 percent of the total exports from India across all sectors and, without exception, Germany, France, UK, Italy and Spain are the big markets for these products.
Though Greece and Portugal, the worst affected European countries, account for only a miniscule portion of the total exports of these items from India, industry experts say the bailout of these countries will reduce purchasing power across the 27-nation bloc.
“Any amount that is pumped to bail out these debt ridden countries will impact money supply across Europe. Moreover, there have been cuts in pension and salaries in Spain that, in turn, will affect Christmas purchases this year. Keeping this in mind, European buyers are going slow on placing bulk orders,” said Vijay Mathur, deputy secretary general of the Apparel Export Promotion Council.
Though demand for Indian products from traditional export sectors from across the globe has risen on average 20 percent this year, it is expected that if the downturn continues in Europe even orders for the upcoming spring and summer seasons will take a hit.