Caught in Russia-Ukraine crossfire, Punjab exporters peg losses at Rs 1,000 crore

Tribune News Service

Vijay C Roy

Chandigarh, March 1

The exporters’ community of Punjab finds itself caught in the Russia-Ukraine crossfire. Amid uncertainty, the community apprehends deferral of payments for exports as various consignments to these two countries are either on hold or stuck at ports.

Payments stuck

State manufacturers export plastic, rubber, garments, hosiery, fertilisers, agriculture implements, scaffolding and hand tools to Russia and Ukraine. The major export centres are Ludhiana, Jalandhar and Amritsar. Exporters say their payments for shipments that were dispatched or are in transit are stuck.

Besides, the decision by the US and its allies to exclude selected Russian banks from the global financial system SWIFT and sudden withdrawal of export credit guarantees for exports to Russia by Export Credit Guarantee Corporation of India (ECGC) is likely to compound the losses, they said. All these factors combined will have a cascading impact on the state’s industry with an estimated loss of over Rs 1,000 crore, said exporters.

For them, what’s most disconcerting is the lack of clarity on how long this conflict will last. Exporters said their payments for the shipments that had been dispatched or were in transit were stuck. With sanctions in place, many buyers are offering payment through a third country, which is not permitted currently.

“Amid this crisis, some importers of Indian goods in Russia have offered payments through third countries like Turkey, UAE, Hong Kong etc as the US and its allies have decided to exclude selected Russian banks from the global financial system SWIFT. So, a request was made to the Centre to permit third-party payments or payments in any other foreign currency by relaxing the current guidelines. The buyer will provide the proof of his relationship with the remitter so as to adhere to the KYC requirements,” said SC Ralhan, president, Ludhiana Hand Tools Association.

Many buyers have also expressed their inability to make payments in any foreign currency or from a third party or a country and they have shown their willingness to make payment in Rouble. “In this regard, we have requested the government to examine the possibility of such payments in Rouble and also allow all export benefits to payments received in Rouble as available for exports in free foreign exchange,” he added.

Harish Dua, MD, KG Exports, said, “Not only the consignments bound to these countries have been impacted, but also those destined for countries such as France have been hit as importers have told exporters to put these on hold. Nearly 50 containers of garments are stranded at the Tuglakabad depot alone in New Delhi,” he added.

All Industries & Trade Forum national president Badish Jindal is of the view that the government should immediately announce compensation for exporters and importers of India.

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