$1-bn Indian exports may go up in smoke due to Ash clouds

New Delhi/ Mumbai: Thousands of businessmen worldwide have suffered following cancellation of flights as the the volcanic ash clouds continued to spread across the the European skies.
Exporters are increasingly becoming jittery of making huge losses and apprehend large-scale cancellation of orders and delay in payments. High-end merchandise exports from India worth $1 billion are likely to be affected due to the air travel crisis, said Ajay Sahai, director general, Federation of Indian Export Organisations (FIEO).
“Exports worth $10 billion are shipped annually by air via European air routes. For EU, consignments worth $1 billion is exported monthly. This is likely to be hit but it is yet to be evaluated. The problem would aggravate if the crisis is prolonged,” he told Business Standard.
While bulk orders for cheaper products are shipped, high-end luxury items and perishable products are sent by the air route from India. Exporters, particularly, those dealing with new clients are more at risk of losing their business, rejection of shipment and cancellation of order bookings, Sahai added.
According to industry estimates, exporters are incurring a daily loss of around Rs. 20 crore. In Maharashtra, exporters have stopped buying fresh vegetables and fruits from farmers because they expect air services to resume after April 23.
Industry sources said nearly 225 tonnes of vegetables and fruits are exported to Europe and the Gulf, out of which 150 tonnes are sent from Maharashtra and the rest from Kerala, Andhra Pradesh and Karnataka.
20/04/10 Nayanima Basu & Sanjay Jog/Business Standard

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Categories: Cargo Apr 2010, Foreign Apr 2010, Indian Aviation- In General Apr 2010