India gets Rs 3,000 crore blow from Pakistan
NEW DELHI - Chemicals and dye-stuff exporters to Pakistan stare at a business loss of Rs 3,000 crore as a result of deterioration in diplomatic relations between India and Pakistan. Of these close to Rs 1,000 crore loss is because of uncertainty in payments of the goods already supplied while remaining Rs 2,000 crore loss is because of uncertainty about the fate of orders already placed by Pakistani buyers.
India exports close to Rs 50,000 crore worth of chemicals and dye-stuffs across the world. Of these, exports to Pakistan stood at over Rs 3,656.29 crore in 2018-19. However, the abolition of the special status of Jammu and Kashmir by the Indian government and consequent lowering of India's diplomatic status by Pakistan has hit India's dyestuff manufacturers hard.
"Over 80% of exporters of dye-stuffs are from Gujarat.
Close to 15% of exporters have Pakistan as their sole market," Yogesh Parikh, president of Gujarat Dye-stuff Manufacturers Association (GDMA) told media persons in the city on Friday. "The payment cycle consists of 90-120 days. We were awaiting payments of goods already supplied to Pakistani buyers," said Parikh.
He also said that businesses welcome the abolition of Article 370 and Article 35-A of the Constitution of India and stand firmly behind the government. However, he drew attention to the fact that close to 2,000 tonnes worth of goods is in transit.
Loss of Pakistan's market will mean a rise of inventory in short term, which will keep prices of products under pressure, This will force manufacturers to look for buyers from other countries like Bangladesh, Sri Lanka, Vietnam, and Indonesia.