Economy

Buying Agents Association urges international majors not to cancel export orders

Meenakshi Verma Ambwani New Delhi | Updated on April 06, 2020 Published on April 06, 2020

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Buying Agents Association (BAA) Chairperson Christine E Rai, in a video message, has appealed to large international companies that source apparel, handicrafts, leather goods and carpets etc — especially from small and medium companies in India — not to resort to cancellation of export orders, in a bid to support the livelihoods of artisans and craftsmen.

At a time when the world is grappling with the Covid-19 pandemic and India is under a lockdown, the BAA believes the small and medium industries that employ artisans and craftsmen and rely on exports are particularly vulnerable.

The BAA, which was formed in 2016 with the support of buying agencies and the Export Promotion Council for Handicrafts, represents buying agents that act as a bridge between overseas buyers and Indian exporters and work with key international companies. Rai said that a large chunk of India’s exports across apparel, leather goods, furniture, carpets and handicrafts among other sectors, is facilitated by the members of BAA.

MSMEs in trouble

“We began witnessing cancellation of orders about two weeks ago and we are looking at millions, if not billions, of dollars of cancellations of export orders right now. It started with apparel and the fashion sector and has now snowballed to the other categories that include home furnishings, carpets, leather goods and handicrafts. Many of these MSME exporters don’t have the cushion to survive this crisis,” she said.

Rai believes the large international buyers need to find the middle road during this unprecedented crisis. “International companies are also renegotiating payment agreements. Many are asking for 120 days instead of the usual 60 days to make payments. We are asking them to instead look at making staggered payments to help MSME exporters pay wages to their artisans and workers and manage their fixed costs,” she added.

Relief measures

Meanwhile, the association has also submitted a petition to the government to support exporters as well service providers in the export sector through various measures. The recommendations include GST exemptions to all service providers for exports for the next six months as well as tax holiday for those with upto ₹10 crore turnover in exports (including service exports), to help the MSME sector.

“The world is also looking away from China as they don’t want to depend on one country to source products. In the coming months, the government should look at measures to enhance the competitiveness of Indian exporters,” Rai added.

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Published on April 06, 2020
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