West Asia conflict upsets Punjab’s export units, disrupts shipping routes

Punjab’s export-oriented industry is beginning to see uncertainty and disruption in shipping routes amid the ongoing conflict in West Asia, reporting stalled shipments, piled-up stock and delayed payments.

Many exporters dealing with markets such as the United Arab Emirates, Iran and Saudi Arabia have adopted a wait-and-watch policy, putting new orders on hold.

At Prima Steel and Tubes in the Kanganwal area,Ludhiana, the stock lies stacked in the factory hall with a complete halt in the dispatches this month.

Earlier the units were sending consignments almost daily to exporters supplying to Arab countries.

Harmanjeet Singh, the unit’s owner, said his business has come to a standstill.

The products manufactured at his factory are also exported, however, indirectly through aJalandhar-based exporter.

“I am an indirect exporter… but ever since the West Asia conflict started… all exports have stayed put… some stock (already assembled) is lying here in my factory while further we have been told to slow down because… the ports are not open… there is no point making products as dispatches are unlikely to happen,” Harmanjeet told TheIndian Express.

He also said while his unit is not directly dependent on LPG as fuel, the slowdown across the industry has affected overall operations.

“Commercial LPG supplies have caused problems for many units which are dependent on it as fuel… I am not dependent on LPG but also overall affected as the work has come to a standstill… I am not the only one… there are others like me who are either direct exporters or indirect exporters,” he said.

Exporters themselves said the disruption has spread across multiple sectors.

Rajnish Ahuja, owner of Rajnish Industries Private Limited and president of the Apex Chamber of Commerce and Industry, Punjab, said his company’s automobile products are usually shipped to Iran and Gulf markets, but the buyers have put orders on hold.

Ahuja said, “My automobile products go to Iran, Saudi Arabia, Dubai etc but exporters have put the orders on hold… as the countries are dealing with war-like situations… no routes are open to send the products… our products going to South America are also following a longer route.

As of now I am working in the domestic market… a large part of export work is at a standstill… we just pray that peace prevails between US-Isreal-Iran…”
The entire Punjab’s industrial clusters are feeling the impact, he said, adding that payments are stuck in many units linked with the chamber in Ludhiana, Jalandhar, Amritsar, Mohali and others.

Industry representatives said the ripple effect is spreading through the supply chain as exporters struggle to meet payment cycles due to stalled shipments.

S C Ralhan, all India president of the Federation of Indian Exports Organisation (FIEO), said exporters and their vendors across the country are facing similar difficulties.

“Exporters and vendors linked to them have gotten raw materials from the market to manufacture products… but the exports to West Asia have been suspended for time being,” he said, adding that the traders are now in no position to return money to the market within 45 days as per the rules.

“This ripple effect can be/will be seen in the market.

In Punjab over 2,500 exporters dealing with sewing machines, fasteners, etc in various places including Ludhiana, Amritsar, Jalandhar and Mohali are affected.”
He also said the situation has worsened due to disruptions in commercial LPG supplies to industrial units.

“It is a double whammy for many as several units are facing a cut in commercial LPG and many others are not able to dispatch the goods.”
The president of World MSME forum, Badish Jindal, said, further orders are cancelled for the time being and it is a tough time for the industry.

“Shipments of exporters are stuck at Mudra and Nhava Sheva (also known as Jawaharlal Nehru Port – JNPT) ports of India and many containers are now coming back as charges of shipment have been increased a lot,” Jindal said.

There have been no movements ahead and the exporters are also not sure when their containers will be back.

One of the ways the government can support the exporters is by waiving off interests on EMIs as the stuck shipments have also cost them lakhs and there is no sight of when further orders will come, he said.

Industrial units including steel rolling mills, induction units and cycle parts manufacturers in Punjab have already been struggling due to shortages of commercial LPG supplies linked to the West Asia conflict.

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