Brexit’s impact on textile and handicrafts exports from India: Industry views

New Delhi, June 24 (KNN) While the government and economists are saying that India is all prepared to deal with the short term and medium term impacts of Britain’s exit from European Union (EU), the exporters, especially from the sectors such as textile and handicrafts, are worried about the impact on the export orders already placed.

“The major impact of Brexit will be on booked export orders of textile and handicrafts because both the currencies will be affected due to Brexit,” said the Indian exporters of Textile and Handicrafts.

Talking to KNN, the President of The Textile Association of India, Arvind Sinha, said that the impact would be bad for booked exports.

“I don’t have exact figure right now but both the currencies - Euro and Pound - will be affected.  Business will be affected as realisation is going down,” he added.

However, he said that the effect will not be much in textile exports because a country needs textile in any case. As such right now we are not worried.”

“I think situation would be good as industrialisation will take place in Britain and employment has to be created. The flexibility of EU will go. I think for textile it is a good time,” he added.

Sinha further explained that, “Whatever business we are doing now that is generally in Euro but the large companies which trade in pound will be affected whether the pound will crash as it is already going down. Pound will go down by at least 15-20 per cent.”

Indian stock markets and the currency cracked under pressure on early Friday trade, in line with global markets, as votes on Thursday’s UK referendum confirmed that Britain will leave the European Union. This news triggered an avalanche of selling across major markets and most major currencies slid to the dollar, on fears of prolonged uncertainty in global business and investment sentiment in the UK and some European economies. Internationally, prices of oil tumbled, but gold rose sharply.

Whereas, the Vice Chairman of Export Promotion Council of India (EPCH) Rajesh Kumar Jain told KNN that handicraft sector has to face the direct loss of around 10 per cent now and same would increase to 15 per cent if Euro and pound will go down. Handicraft and textile would be affected majorly due to this certain change.

He said, “We were already facing the problems but now this new problem has arisen. We have faith in government that how it would deal with this situation and compensate it.”

“Britain is a free country and their decision is impacting Indian exporters. We are small exporters which can’t do hedging so will bear a loss on monetary terms,” said Vice Chairman adding “we had Rs 1766.15 crore exports for the year 2015-16.”

Finance Minister Arun Jaitley today said that India is well prepared to deal with short and medium-term consequences of Brexit. (KNN/ AR)