US and European importers of merchandise like apparel, bags and jewellery are asking their Indian suppliers to ship cheaper products, as the purchasing power of consumers in those markets has declined due to inflation.
Ajay Sahai, Director-General of the Federation of Indian Export Organisations (FIEO), said that what one is seeing is that low-value products are witnessing good traction, and this year exports will be high volume but less-valued products.
“The trend is being witnessed by the textile, gems and jewellery, cosmetics and other industries,” added Sahai.
It is to be noted that inflation is above 10 per cent for the first time in 40 years in the UK.
And in the US, inflation in August was firmer-than-expected, with the consumer price index increasing 0.1 per cent from the previous month.
This high inflation is taking a toll on the consumer’s pocket, forcing them to cut down on spending, especially on discretionary items.
That is getting reflected on the orders for Indian exporters from their biggest markets.
