Plummeting rupee gives rise to 'new African safari'
Due to continued economic recession in Europe, the African countries have become the new hub of export of engineering goods and recent difference of rupee and dollar has also turned African continent as a favoured destination to exporters looking forward to grab the market of their products in African territory.punjab Updated: Aug 21, 2013 21:18 IST
Due to continued economic recession in Europe, the African countries have become the new hub of export of engineering goods and recent difference of rupee and dollar has also turned African continent as a favoured destination to exporters looking forward to grab the market of their products in African territory.
In the past four years, due to European recession, export to African nations has augmented beyond 285 per cent and this year export figures are likely to cross 7600 million dollars, deputy director of Engineering Export Promotion Council (EEPC) Opinder Singh told HT.
"South Africa, Nigeria, Egypt, Algeria and Kenya turned out to be great markets of Indian goods and you can find them at any good store in these countries," he said.
"The Indo-African current trade scenario can be described as India's new African safari as in the past five years, India has extended lines of credit worth 2 billion dollars to African countries," Opinder added.
The regular fall of rupee against American dollar will boost export to African countries, which could be realised from the fact that even from Punjab, export of auto parts, hand tools, garden tools, cycle parts has increased, he said.
Due to widened gap of rupee-dollar value, buyers of European countries have started bargaining for already placed orders and exporters, being helpless, are surrendering to pressure tactics, Singh said; but no such issues involved in export to African countries.
He said the concerned union ministry has unveiled a Focus Market Scheme (FMS), in which 29 new countries, mostly from African continent have been included and incentive for export to such countries has been increased from 2.5 per cent to 3 per cent and even Market Development Assistance (MDA) has been increased from 1.5-lakh to 2-lakh per event under focus category.
A handtool and hardware exporter Ashutosh Wadhwa said he has been exporting more to African countries in the past few years.
"We have received good export orders, but frequent fluctuation in raw material in India has hindered optimum use of the export potential in Africa, as our immediate competitor China is not having any such problem, where rate of raw material is fixed for certain period," he said.
Another city-based exporter, Jagmeet Singh Panesar, said now he has shifted his trade to Africa, where profit margin is good with huge potential for growth.
Manjit Singh, who exports variety of engineering goods to South Africa, suggested that Indian government should provide warehouse facility in African continent for optimum use of the export potential there.