Economy

Delay in lockdown relaxation would hurt business, jobs: FIEO

Our Bureau New Delhi | Updated on April 14, 2020

Reiterate demand for the economic package to pay wages, rentals

Exporters have expressed concern over the Centre’s decision to defer the withdrawal of restrictions on manufacturing for identified sectors including exports during the lockdown period as they say that the delay would lead to more cancellation of orders and loss of wages for workers.

“Non-adherence to the delivery schedule for exports will result in cancellation, penalties and market loss, besides the business loss to enterprises. The exporters, particularly MSME exporters, have no liquidity to pay wages for the month of April as they are unable to conduct any business activity during the lockdown,” according to Federation of Indian Export Organisations (FIEO).

Prime Minister Narendra Modi, on Tuesday, announced an extension of the lockdown period, till May 3, but did not immediately allow additional relaxations for manufacturing. Modi said that a conditional withdrawal of the lockdown could be permitted in areas where the spread has either been contained or prevented, and a decision will be taken April 20 onwards. The three-week lockdown was scheduled to end on April 14.

The Department for Promotion of Industry and Internal Trade had recently proposed to the Home Ministry that in case of extension of lockdown those companies and MSMEs with export commitments be allowed to operate with minimal workforce and necessary movement of material. It also suggested that sixteen sectors, which includes telecom equipment, gems & jewellery, steel and ferrous alloy, automotive units, defence manufacturing and all units in Special Economic Zones (SEZs) and Export Oriented Units (EOUs), be allowed to operate adhering to safety, sanitisation and distancing norms.

FIEO demanded that a comprehensive economic package may be announced to with interest-free credit to cover six months of wages, rent and utilities along with a moratorium to repay in instalments after six months. “Without such support, the government should not expect the industry to pay wages during the lockdown and any coercive action to bring about the same will only be counterproductive,” it said.

The exporters’ body had earlier warned that with the cancellation of over 50 per cent of export orders in the last few weeks due to COVID-19 disruptions worldwide there was a chance that there could be 15 million job losses in exports units.

India’s goods exports declined by 1.5 per cent to $ 292.91 billion in April-February 2020 compared to last year. Exports increased marginally in February 2020, but are expected to fall in March 2020 because of the breakdown in production, supply and payments.

Published on April 14, 2020

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