NEW DELHI: Foreign buyers for Indian MSME products have put a pause on their orders amid the growing Coronavirus impact across the world even as there is a possibility of these orders getting cancelled eventually, according to the export promotion body Federation of Indian Export Organisations (FIEO). “In a lot of emails, buyers are asking our members to hold back the consignments. Most of the request is emanating from Europe followed by the US and other regions. Since demand has taken a hit, we feel many of these orders may eventually be cancelled,” Ajay Sahai, CEO and DG, FIEO said.

Indian MSMEs, which had 48.10 per cent share in the country’s total exports worth $330 billion in FY19, will be most affected as the global trade is shaken up due to supply chain disruption along with overstretched storage capacities and other challenges. “MSMEs in the labour-intensive sectors will take a maximum hit because they are by and large more dependent on advanced economies like Europe and the US that are virtually in a lockdown condition. It seems that the current situation may prevail until Q2 FY21,” said Sahai. However, exact figures with respect to the number of MSME exporters and amount of export impacted are yet to be known.

FIEO had last week in a meeting with the Commerce Ministry suggested relief measures to be taken for the export sector. The body sought “collateral-free lending up to Rs 2 crore in true spirit for MSME. The collateral requirement may be capped at 35- 40 per cent for lending beyond

Rs 2 crore.” Among other key asks included extending the export obligation period under advance authorisation and Export Promotion Capital Goods scheme by one year, an extension of remittance period by the RBI from nine months to 15 months looking to the liquidity challenges and slow consumer spending, immediately releasing all exports benefits to exporters including risky exporters for which a bond may be taken from risky exporters etc.