FIEO estimates 10 million layoffs in export units

Ten million people in the export sector will be out of job by March this year, as Indian goods find fewer buyers in the international Coming to terms with layoffs market which is battling the worst crisis since 1929.

"There will be 10 million job losses by March," Federation of Indian Export Organisations (FIEO) President A Sakthivel told reporters here on Tuesday.

Indian exports, which account for just about 20 per cent of the country's Gross Domestic Product, are a highly labour-intensive activity, employing 150 million people.

The country's exports, which posted a robust 30.9 per cent growth rate in the first half of fiscal, contracted by 12.1 per cent in October, for the first time in the last five years. The negative trend continued in November, when exports fell to $11.5 billion from $12.7 billion. The data for December are yet to be released.

"I can safely say that negative growth trends will continue in December and in the next couple of months... I hope we will end the fiscal with exports of about $175-180 billion," Sakthivel said.
FIEO yesterday said there was no "serious consideration" for exporters in the measures announced by the government last week.

The target for the current fiscal is $200 billion while exports totalled about $160 billion in 2007-08.

Europe and North America, which account for 37 per cent of India's merchandise exports, are reeling under recession and slowdown.

The FIEO chief said he did not see positive trends before the fourth quarter of the calendar 2009, "though a complete U-turn may take a little longer", he said.

Agencies

2.5 lakh may lose jobs in BPO sector

Business Process Outsourcing firms are likely to see 2.5 lakh job losses by the first quarter of 2009 in the wake of downturn in the US and other developed economies, BPO industry association said.

Though the industry is likely to see thousands of job losses, the silver lining is that the recession would compel more companies in the US and Europe to look at outsourcing as a way to cut costs and improve efficiencies, the Business Process Industry Association of India (BPIAI) President Samir Chopra said.

Praveen Sengar, Head-Software, Services & Industry (Vertical Reserach), IDC India Ltd saidthe slowdown is likely to impact expansion plans of the industry, as the time taken for signing up new clients is taking longer time.

"It will also result in greater consolidation and promote diversification into areas hitherto considered as non-core activities," Sengar said.

Chopra said that urgent government measures are required to boost the industry, specially for the medium and small enterprises.

Both fiscal and administrative measures like extending tax relief for another 5-10 years and export promotion steps, including market development fund is need of the hour, Chopra said.

He further said the terrorist attacks in Mumbai has led to the widespread cancellations of visits and forthcoming international events.

Source: Times of India