Caught in the crossfire, exporters put Rs 1,000 crore losses: The Tribune India
Vijay C Roy
Chandigarh, March 1
Punjab’s exporting community finds itself caught in the Russian-Ukrainian crossfire. Amid uncertainty, the community fears a postponement of payments for exports, as various shipments to these two countries are either on hold or stuck in ports.
State manufacturers export plastics, rubber, clothing, knitwear, fertilizers, agricultural tools, scaffolding and hand tools to Russia and Ukraine. The main export centers are Ludhiana, Jalandhar and Amritsar. Exporters say their payments for shipments that have been shipped or are in transit are blocked.
In addition, the decision of the United States and its allies to exclude certain Russian banks from the SWIFT global financial system and the sudden withdrawal of export credit guarantees for exports to Russia by the Export Credit Guarantee Corporation of India ( ECGC) are likely to aggravate losses, they mentioned. All these factors combined will have a cascading impact on the industry in the state with an estimated loss of over Rs 1,000 crore, the exporters said.
For them, what is most disconcerting is the lack of clarity on the duration of this conflict. Exporters said their payments for shipments that had been shipped or were in transit were blocked. With the sanctions in place, many buyers are offering to pay via a third country, which is currently not allowed.
“In the midst of this crisis, some importers of Indian goods to Russia have been offering payments through third countries like Turkey, UAE, Hong Kong, etc., as the United States and its allies have moved to exclude certain Russian banks from the SWIFT global financial system. Thus, a request has been made to the Center to allow third-party payments or payments in any other foreign currency by relaxing the current guidelines. The buyer will provide proof of his relationship with the sender in order to meet KYC requirements,” said SC Ralhan, president of the Ludhiana Hand Tools Association.
Many buyers have also expressed their inability to make payments in any foreign currency or from a third party or country and they have shown their willingness to make payment in rubles. “In this regard, we have requested the government to consider the possibility of such payments in ruble and to also allow all export benefits to payments received in ruble as available for exports in free currencies,” he said. -he adds.
Harish Dua, MD, KG Exports, said, “Not only shipments to these countries have been affected, but also those to countries like France, as importers have asked exporters to suspend them. Nearly 50 containers of clothes are stuck at Tuglakabad depot in New Delhi alone,” he added.
All Industries & Trade Forum National Chairman Badish Jindal is of the opinion that the government should immediately announce compensation for India’s exporters and importers.