Labour scarcity a serious threat to export sector - experts

22 Sep '10

2 min read

According to experts, there is an urgent need to attend to structural flaws which are impediments in the country's export growth.

There are many major difficulties that the country is experiencing with regards to exports of key products owing to their over dependence on other countries for raw material, discounted order rates and availability of skilled workers, which are coming in the way of the country's robust export growth.

The country's export proceeds for the initial eight months of current year summed up to US $44.5 billion, which is 19.7 percent higher than revenue generated during corresponding period last year.

Nonetheless, escalating prices of imported raw material required for manufacturing final products, coupled with scarce labour availability, are adding to the production cost and are adversely affecting the manufacturing and business capacity.

A number of major export sectors including footwear, seafood, textile and garments greatly rely on imported raw material for their production purpose. Footwear and textile and garment industries import around 60-70 percent of their requirements.

Labour scarcity issue, particularly the need for manual labourers in labour-intensive garment, woodwork and footwear industries, is now getting serious. A number of firms are hunting for labour even outside the country.

The industrial parks in Hanoi even are seen flooded with job opening announcements displayed at various places like on company gates, trees and electric poles, but there is meagre response. With low wages and arduous work, the firms are now losing their appeal to the domestic workers.

Over the last few months, though country's leading importers like the EU and US have escalated their orders for garment items by around 40-50 percent, but the exporters are compelled to refuse several orders, due to dearth of workers.

Fibre2fashion News Desk - India

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