Over 15 million jobs may get lost in India’s export sector on account of half the orders getting canceled and rising non-performing assets in exporting units, as per the apex body of exporters, Federation of Indian Export Organisations (FIEO).
Sharad Kumar Saraf, President, Federation of Indian Export Organisations stated, “With the cancellation of over 50% of orders and a gloomy forecast for the future, we expect 15 million job losses in exports and rising NPAs amongst exporting units, hitting the economy very badly."
The apex body’s estimate comes days after the International Labour Organisation stated that about 40 crore workers in India working in the informal sector are at risk of falling deeper into poverty during the COVID-19 pandemic crisis.
The World Trade Organization estimates that the decline in world trade due to COVID-19 will likely exceed the trade slump brought by the global financial crisis of 2008-09 with merchandise trade expected to decline 13-32% in 2020
As per Saraf, if factories are not allowed to work with a minimum workforce, many of them will suffer irreparable losses and will be brought to the brink of closure. In this regard, Saraf has sought relief from the government and asked for announcing a relief package for exports. The apex body also called for exports related manufacturing to be allowed with minimum workforce adhering to safety, sanitization, and social distancing norms.
The apex body’s concerns are legitimate given that the ILO has estimated that the bulk of the losses will be borne by the Asia Pacific region, which is estimated to lose the equivalent of 125 million full-time jobs. The actual number of people put out of work may be much higher, because based on the study, the majority of the losses will come from sectors such as retail, accommodation and food services, and manufacturing. These are sectors that tend to rely heavily on part-time and shift work, meaning that the lost working hours could represent a far greater number of jobs.