EPCH seeks govt intervention for relief from high freight charges

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August 18, 2022, New Delhi – Handicrafts sector plays a prominent role in the country’s economy by earning much needed foreign exchange through exports and also generating substantial employment for craftsperson’s. This decentralized sector has buyer driven overseas markets which demand innovative and quality products.

The pandemic has disrupted the Exim logistics across the globe due to which the exporters have been facing shortage of containers and higher charges. The Handicrafts sector is working hard to come out of the situation and is looking forward for the better business and foreign exchange earnings. Recently, the freight charges in India have been increased drastically leading to uncompetitive business scenario globally for handicrafts exporters, however the Competitor countries have decreased the freight charges, whereas the Indian exporters are facing increase in freight cost. Despite all the challenges the export of handicraft in the year 2021-22 has reached Rs. 33253.00 crores (US$ 4459.76 million) showing an increase of 29.49 %.

Raj Kumar Malhotra, Chairman-EPCH informed that The US Government has recently passed a law named Ocean Shipping Reforms Act of 2022 to curb arbitrary and improper functioning of shipping and logistics. By this law, the Federal Maritime Commission has been given powers to stop unfair trade policy being adopted by shipping lines. According to the latest information, these shipping companies have drastically cut the fare of containers (40’ high cube) going from China to USA, which was around USD 15000 few months ago and has been drastically reduced by over 60% thus reducing to around USD 5500, while the fares of containers going from India are at US$10,000. As a result, an additional shipping fee of about US$5000-US$6000 is being charged for the fare of a container going from India to USA.

Rakesh Kumar, Director General-EPCH, informed that the EPCH has requested Ministry of Commerce and Industry and Ministry of Shipping to intervene in the matter and provide an alternate viable solution both in the short-term as well as in the long term. A similar mechanism as in USA may be introduced in India also to keep check on the freight charges. Further, in order to provide some relief to the handicrafts exporters, container freight subsidy to the exporters of handicrafts may be considered.

Kumar, further said that under high freight & container charges, US importers have either started holding or cancelling orders placed with Indian handicraft exporters. This has created a serious crisis for the exporters, especially the small and MSME exporters engaged in production of Handicraft products.

EPCH is a nodal agency for promoting exports of handicrafts from the Country to various destinations of the world and projecting India’s image abroad as a reliable supplier of high quality handicrafts goods & services. The Handicrafts exports during the year 2021-22 was Rs. 33253.00 Crores (US $ 4459.76 Million) registering a growth of 29.49% in rupee term & 28.90% in dollar terms over previous year, informed Rakesh Kumar, Director General EPCH.

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