Engg exports from Punjab likely to dip 40 per cent

Engineering exports from Punjab is likely to decline by 35-40 per cent in the 2008-09 financial year as compared to the corresponding period last year. Hand tools, fasteners, auto parts, bicycle and bicycle parts’ exports are among the sectors which have been affected, as per the observation by the Engineering Export Promotion Council (EEPC), Jalandhar.

In the financial year 2007-08, the total engineering exports from Punjab was to the tune of about Rs 8,000 crore.

Speaking to Business Standard, EEPC-Jalandhar assistant director Opinder Singh said, “Due to the economic slowdown, the demand has come down drastically. Further, the consignment, which was to be sent by March 31, 2009, was put on hold by the importers, as the old inventories are still lying with them due to lesser demand. The importers, especially from the European and the US markets, want to clear the inventories first, before taking fresh consignments. So, the exporters of Punjab are not proceeding with the orders and that had been one of the reasons behind decline in exports. As a result the export is likely to be delayed by three to four months.”

Although the data for the fiscal year 2008-09 is yet to be compiled by EEPC, according to its observation this year engineering exports from Punjab is likely to decline by 35-40 per cent. Among the worst hit sectors are hand tools, fasteners, auto parts, bicycle and bicycle parts’ exports.

Singh added, “Hand tools export is likely to decline by 35 percent, fasteners(27-30 percent), auto parts(30-35 per cent) and Bicycle parts(20-25 per cent). Also diesel engine parts would decline by 30-35 per cent.”

He added that the exact value of exports would be known by the first quarter of the current financial year, as the compilation of export data would be completed.

The decline in exports has affected the Industry to a great extent. “The Industry has suffered a lot due to the ongoing slowdown. The government have to take proactive steps, in order to boost the exports and Industry. Already textile sector has retrenched so many workers. If the situation continues, the same situation would arise in the engineering sector,” said Ashwini Kohli, senior vice-president, Punjab Chamber for Small Exporters, Phagwara.

“In order to provide relief to the export sector, we demand that the central government should now provide some relief to industries like 100 per cent exemption on export Profits u/s 80HHC, 100 per cent exemption from service tax, TDS and other micro taxes to exporters exporting their full productions.” he added.

Also, exporters demand that the state government give 100 per cent VAT refund in time, 50 per cent concession in house tax, and uninterrupted electric supply to export and SME Units and exports must be a declared item under essential services Act.