Multiple Headwinds at Exports India
Indian exports may face Further challenges! India Ratings and Research (Ind-Ra) believes the ability of export-oriented domestic manufacturers to keep up merchandise goods supply will remain key to navigating the path to recovery in exports. While domestic exporters are facing vulnerability in form of geography and commodity concentration, overall demand prospects for merchandise goods from importing countries could improve, creating a potential demand-supply mismatch for Indian exports. A prolonged disruption due to Covid-19 could materially impact the credit and liquidity profile of companies in some of the export-heavy sectors such as textiles, gems and jewellery and auto ancillaries. With the latest developments between India and China, Indian exports may face further challenges. Since January 2020, Ind-Ra has taken 25 negative rating actions, 13 positive rating actions and revised the rating Outlook down for another 16 issuers meaningfully exposed exports.