Exporters termed 2024 as a mixed year amid US elections and slow demand in some European countries, especially France and Germany, even as they expect the start of the holiday season in the Western markets to boost shipments.
“There was a 5-8% rise in exports over last year, led by demand in the US, the EU and the Middle East,” said Rafeeque Ahmed, chairman of Farida Group, India’s largest shoe manufacturers and exporters.
“The average order value was 20% lower than before. Clients are asking for lower-ticket price items,” said Mahavir Pratap Sharma, founder of Jaipur-based hand-knotted woollen carpet exporter Oscar Expo Design.
India’s merchandise exports in October surged 17.3% from a year earlier – the fastest in two years – to $39.2 billion, driven by improved demand from developed markets.Garment exporters are getting increased orders, as global brands that sourced products from Bangladesh are diverting some of the orders to India amid political instability and law-and-order issues in that country.”There is 10% growth because of the Bangladesh factor and another 5-10% growth due to demand from the US and the EU,” said Sanjay Jain, managing director of TT Ltd, an exporter of readymade garments.
Jain said there was “good growth” in the September-October period and the next season is expected to be better.
The ongoing international trade disruptions along with volatility in crude and metal prices have played a key role in increasing the value of exports to some extent, according to Ashwani Kumar, president of the Federation of Indian Export Organisations.
Meanwhile, rising Israel-Iran tension is leading to logistical challenges, as most of India’s trade to Europe, Africa, CIS and the Gulf region is happening on the Red Sea route or the Gulf region, prompting buyers to have higher inventories.
Exporters said sustainable handicraft and products focused on circularity are now being demanded in the western markets.
“Fresh orders happened whose impact we will see early next year. We have seen 12-16% growth in orders, especially furniture and sustainable products,” said Rakesh Kumar, chief mentor, Export Promotion Council for Handicrafts.
Kumar said a lot of selling is happening through ecommerce as brands which had shut physical stores during Covid are now buying online as they save costs such as warehousing, inventory, rental and overheads.
“Due to the US elections, weakening of the euro and war escalations, there was no bump in business this year,” said a Gujarat-based exporter of apparel to Europe.
As per Sharma, exports could gradually improve as the US administration sets in under president-elect Donald Trump.