India is currently the third most affected country in the world. As the fifth largest economy in the world, India’s “lockdown” during the epidemic caused an economic “suspension” that lasted for three months. Although India announced on June 30, 2020 that it had entered the “Unblocking 2.0” phase and gradually relaxed control measures, it will still take time to fully “restart” economic activities.
Recently released by the United Nations Conference on Trade and Development The report shows that due to the epidemic, India’s total trade loss was approximately US$348 million. Specific to each industry, the chemical products industry lost about 129 million US dollars, the textile and clothing industry lost about 64 million US dollars, the automobile industry lost about 34 million US dollars, the electronic machinery industry lost about 12 million US dollars, the leather industry lost about 13 million US dollars, and the metal industry lost about 13 million US dollars. The and metal products industry suffered losses of approximately US$27 million, and the wood products and furniture industry suffered losses of approximately US$15 million.
my country is India’s largest source of imports. The Indian economy has suffered a huge impact, which will greatly increase the risks of my country’s exports to India, especially the automobile manufacturing industry, photovoltaic industry, and textile and clothing industries. The risks of the industry deserve the attention of enterprises.
Textile and apparel industry: payment default risk has increased
Quick A growing middle class and an increasingly powerful manufacturing industry have gradually made India the center of the world’s apparel retail industry. However, with the development of the epidemic and the extension of the blockade period, large shopping malls and non-essential physical stores in India have been required to suspend operations. In addition, consumers’ panic about the epidemic has reduced consumption activities, resulting in a sharp decline in Indian clothing retail sales recently.
At the same time, because India’s national logistics has not yet fully recovered, and the Indian government stipulates that e-commerce companies are not allowed to sell and deliver non-essential goods during the “lockdown” period, and only necessities are allowed to be delivered, therefore, Online sales channels for textiles and clothing also face delivery difficulties. The above operating difficulties will lead to a decline in the payment ability of Indian import companies and an increase in the risk of default.
Beware of risks when exporting to India in the near future
Based on the recent epidemic in India Regarding the changes in control measures and their impact on related industries, here are three suggestions for relevant export companies.
First, in the face of new orders brought about by India’s recent announcement of relaxing epidemic prevention and control measures and resuming economic activities, it is recommended that companies be cautious and try to choose high-quality, long-term customers. , treat ordinary small customer orders with caution, and pay real-time attention to the country’s traffic and cargo transportation control conditions to avoid additional economic losses caused by a significant increase in costs caused by inability to pick up goods or transportation delays.
Second, it is recommended that enterprises keep abreast of the financial status of their customers. Even high-quality customers with long-term cooperation should focus on changes in their ability to pay and willingness to pay, and try to use letters of credit. and other payment methods with less risk, and try to increase the proportion of advance payment in transactions.
Third, although India has gradually relaxed epidemic prevention and control measures and stores, shopping malls, etc. have gradually resumed business, due to the uncertainty of the development of the epidemic, its policies may be relaxed at any time. There is a possibility that prevention and control measures may be tightened again, and it is recommended that enterprises prepare for the risk of a rebound of the epidemic in advance. </p
