Slowing exports to affect readymade garment industry

Might also cause loss of jobs in some sectors

India’s slowing exports are signalling towards a crisis in labour intensive industries and the country’s gems and jewellery, readymade garments and electronic goods industries may also suffer a huge blow, if demand remains sluggish in major exporting destinations, the latest trade data suggests.

 Drying demand for labour-intensive goods is also giving rise to renewed fear of joblessness in the sector, which is the main source of livelihood for a substantial chunk of India’s population.

 According to the latest export figures, the growth in labour-intensive exports like gems & jewellery and readymade garments have contracted and the shine in the new and emerging markets, which fetched good return for India’s exports after the 2008 global financial crisis, are slowly getting blurred.

 According to the Federation of Indian Exporters Organisation (FIEO), the prolonged crisis in the United States and European countries are in all likelihood going to affect the emerging markets of  Latin America, South Africa and South-East Asia in the coming few months.

 The official export data for the month of April clearly shows a definite decline in demand for labour-intensive products in the foreign markets.

The exports of gems and jewellery has declined 25.7 per cent in April compared to the same month last year. Similarly the export of readymade garment has come down by 9 per cent year-on-year.

 Not only this, the shipment of leather and electronic goods and plastics have all come down in comparison to last year.

 Analysts say, the steady decline in labour-intensive products in the past few months is signalling towards job creation taking a hit in these sectors in the coming months.

 India could achieve a handsome 20 per cent export growth in the year 2011-12 on the back of a good performance by labour intensive sectors and growing demand from the emerging markets.

Meanwhile, exports had registered around 18 per cent growth in all textile segments last year.