Centre considering exporters’ demand to allow limited manufacturing with 50% workforce

Amiti Sen New Delhi | Updated on April 03, 2020

Union Home Secretary Ajay Kumar Bhalla

May be impossible to regain loss of global market share post lockdown, exporters tell government

The Centre is considering a demand made by exporters to allow units to work with 50 per cent of their workforce amid the lockdown. Exporters are concerned that a complete halt in production for the entire period could lead to the permanent loss of some markets.

“The Commerce Ministry, Home Ministry and Finance Ministry are examining the request and a decision is likely soon,” a government official told BusinessLine. “The Centre also has to take a call on the level of supervision under which manufacturing can be allowed, as exporters are not in favour of too many inspections.”

Home Secretary Ajay Bhalla recently held a video conference with the Chief Secretaries of all States to discuss allowing limited production in manufacturing units in the lockdown period. While Punjab and Haryana have already allowed factories to function, some manufacturers complain that there are way too many conditions with regard to environment, health and labour, and related inspections, hampering operations.

“All exporters are willing to adhere to the safety norms prescribed by the government, such as ensuring adequate distancing and maintaining hygiene. But if we go back to the ‘Inspector Raj’ regime, it will make things difficult,” said a person with a garments factory in Ludhiana.

Limited manufacturing

Exporters from various sectors have been asking Commerce Minister Piyush Goyal to ensure that they are allowed to continue with production even if it is not at full capacity. In a meeting that Goyal held with exporters across sectors earlier this week through video conference, the latter proposed that all manufacturing companies in exports be allowed to operate, with 50 per cent of the manpower, maintaining sanitation, safety and social distancing norms. Otherwise, the loss in exports will result in market loss, which will be extremely difficult to recover, they said.

“Our loss will be China’s gain, which is using all means to gain greater market access with increased export rebate VAT,” pointed out the Federation of Indian Export Organisations (FIEO) in its presentation. The FIEO has also written to the Home Ministry, proposing that exporting units be allowed to function in all States.

With the number of Covid-19 cases crossing 2,000 in India, with over 50 deaths, there is little certainty on what the situation will be on April 14, when the lockdown period ends, leaving exporters even more anxious about their operations.

Published on April 03, 2020

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