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Amid Ukraine crisis, Punjab exporters stare at ₹500-crore losses
Russia-Ukraine war has hit the industry badly with several exporters across the state staring at losses in crores. Exporters in Punjab are staring at nearly ₹500-crore losses due to delayed payments
The Russia-Ukraine war has hit the industry badly with several exporters across the state staring at losses in crores. Not only are huge consignments of goods such as hosiery items, bicycle parts, tyres and rice stranded at dry ports, industrialists who received the letter of credit from their buyers in Russia and Ukraine have no option but to wait for payments for an unknown period with the risk of suffering huge losses. Moreover, a number of consignments are stuck midway.
Exporters in Punjab are staring at nearly ₹500-crore losses due to delayed payments and other factors arising from the ongoing war in Ukraine, said Badish Jindal, president, All-India Trade Forum (AITF). A number of bicycle parts manufacturers in Ludhiana have been exporting tyres, coaster brakes, pedals, rims to clients in Ukraine. Also, Russia has been buying tyres from a number of manufacturers here.
Harsimarjit Singh Lucky, managing director of ‘Lucky Exports’ in Ludhiana, which exports key bicycle components to Ukraine, said about four of his consignments worth ₹3.5 lakh dollars are stranded in transit near Turkey. “We have no other option but to wait and watch. It is not only my money but my client’s money also,” he said.
Not only bicycle parts, but over two dozen containers of ‘Lal Qila basmati rice’ sent from Amritsar are also stuck midway to Ukraine.
“The consignments of rice worth ₹4 crore on way to Ukraine sent from Amritsar are stranded. Besides, for goods already delivered, the letter of credit issued will not be validated. The uncertainty is haunting,” said Arvinder Pal Singh, partners of Amar Singh Chawal Wala and president of Punjab Rice Millers Association.
Varun Sureka, a prominent tyre exporter in Ludhiana, who started trade with Russia only last year, said due to the ongoing war between Russia and Ukraine, routing of trade will now be via China as clients in Russia will not risk taking the sea and land route through Europe to India.
“It’s a direct benefit to China over India due to the ongoing conflict,” he said.
