The Red Sea crisis has already dampened Indian exports to the US, Europe and the Mediterranean region. In the coming months trade with these regions is further expected to get difficult.
Especially, Indian apparel or readymade garment export volumes are already facing a decline in demand. As per the available government figures, a 15% year-over-year fall in Indian RMG exports in November has been reported, aggravating from an 8% drop in October.
The Red Sea crisis could only add to the demand pressure and this requires devising new strategies to push export volumes. According to them, markets like Latin America and Australia could present some growth opportunities, though incremental growth would not come quickly.
“The world is witnessing two wars and inflationary pressure all across the globe and realignment of its value chain,” said Mithileshwar Thakur, secretary general at Apparel Export Promotion Council (AEPC).
Thakur also noted, “It is time for India to capture the void spaces and create new ones, we have advantages and inherent strengths to make this possible. Branding and diversification of our export’s basket is key to success.”
At the same time, Naren Goenka, chairman of AEPC, expressed concerns over rising shipping costs as a consequence of the Red Sea crisis.
“Indian exporters fear that average freight costs may go up by 25% as insurance premiums may rise,” said Goenka.
He added, “This (crisis) can further delay our delivery schedules and increase our logistics costs, which at the moment is a pressing concern. The solution to this will surely be multilateral and multiparty participation, which the world should not delay any further.”
AEPC recently unveiled plans to push Indian apparel exports by value from US$16-17 billion at present to US$40 billion by 2030 as trade diversification trends within Asia gain pace.
