Argentina’s struggling economy is impacting the Indian exporters big!
While the country is witnessing slump in the number of orders from this South American country, even for the existing orders, costing is under huge pressure.
With a population of 44 million people, Argentina is the third largest economy of Latin America. Credit Rating Agencies are of the opinion that owing to the fast worsening economic condition, the country could go bankrupt.
These are worrying signs!
Notably, Argentina’s currency, peso, lost a quarter of its value against the dollar in August this year, and since 2018, there has been fall of around two-third compared to dollar.
In 2017-2018, India had exported apparels and made-ups worth US $ 39.71 million, whereas in 2018-2019, it decreased by 16.64 per cent to clock US $ 33.60 million.
So far in the current fiscal year, India has exported the same worth US $ 9.76 million.
Many Indian exporters have their clients in Argentina, with majority of them being SMEs. In Jaipur alone, over 20 exporters have reasonably good business relations with Argentina and their businesses too have been impacted significantly.
Madan Gupta, Director, Abhinav Fashions, told Apparel Resources, “We worked with Argentina market for around 15 years, but it has almost stopped in recent years. Unless the economy improves in Argentina, it is hard to get business from there.”
He further said that overall textile exports to Argentina have reduced by almost 50 per cent.
Apart from garments, made-ups is also a major product category for Jaipur as far as Argentina is concerned.
As per the media reports, the country has burnt US $ 15 billion in foreign reserves over the last month to stabilise the peso, which has crashed along with country’s bonds after its market-friendly president Mauricio Macri faced a sharp electoral defeat.
The country has the maximum rate of interest in the globe, which is 60 per cent.