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Export payment defaults on the rise

19
Nov '08
The effects of global financial meltdown brought about by the sub-prime crisis and resulting in economic recession across all global markets is now slowly and surely reaching the shores of India. Exporters from India mainly from the garment and textile industry are complaining of default in payments from their principal market; US.

Among these defaulting companies in the US are those who have pulled down their shutters for good. This has led to these exporting companies from India lining up for insurance claims. Claims for as much as Rs 1000 million, over and above the normal amount of claims are supposed to have been put up in the last few months, though a clearer picture is expected to emerge within 45-60 days.

A hike in claim rates has been witnessed in the last few months more so after the financial crisis unfolded. The Indian textile and garment exporters are in for a tough time in the next few months. Along with falling order book positions and not enough liquidity to shore up their exports , now they have to face the possibility of defaults which may see the crisis within the sector widening to unprecedented levels.

Fibre2fashion News Desk - India


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