“For four years since 2004, we have had a wonderful run. But things have got worse since 2007. First it was the rising rupee and since September last year, orders have dried down. The future is uncertain and we may have to end up laying off 2,000 employees,” M Rafeeque Ahmed, chairman, Farida Group.
As the head of a company that exports footwear, Ahmed is a small businessman with a big worry —the order book of his leather products is shrinking every month, as the ripple of recession in the industrialised world assume transcontinental proportions.
A booming world economy meant burgeoning order books and the “Made in India” brand was slowly beginning to carve out a niche in the competitive world market.
But come 2007, first a persistently rising rupee upset the applecart and then the stunning collapse of several Wall Street institutions triggered an economic meltdown.
While the government has announced measures to address the impact of global slowdown on India’s exports, worries remain with export growth dipping to 17 per cent.
“A Committee of Secretaries has been set up to address, on continuing basis, procedural problems faced by exporters,” said Pranab Mukhejee, in his budget speech.
“There is uncertainty and anxiety among companies and orders had dried up in the last two months. But one can see early signs of demand picking up in the coming months,” said OP Lohia, managing director, Indo Rama Synthetics.
Ahmed echoed similar views. “This is not the end of the world. A little of bit of government support can help reduce prices of our products by 15 per cent in the world market. This will bring back demand.”
For India's exporters, the global credit crisis could not have come at a worse time as US accounted for about 13 per cent of the total Indian exports in 2007-08.