Exports from Karnataka take a severe beating

The transportation costs through the sea have gone up due to the crisis in West Asia.
Exports from Karnataka take a severe beating
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BENGALURU: The conflict in West Asia and the coming US elections have affected exports from Karnataka. Companies manufacturing automobile components, engineering and aerospace equipment, and iron castings have taken a hit. The Russia-Ukraine war, followed by the Israel-Palestine and Israel-Iran conflict have impacted the state’s exports, according to industrialists here. However, export of defence items to Israel has grown manifold.

“Export of automobile components from Bengaluru, Hubballi and Belagavi to Sweden, Germany and the Czech Republic has been impacted significantly due to the crisis in West Asia,” CR Janardhana, former president of the Federation of Karnataka Chambers of Commerce and Industry, told TNIE.

He said an industrialist, whose components were most sought after by the aerospace industry globally, was impacted so badly that he has shifted his business to the defence sector.”

MJ Prasad of Accutech Enterprises in Peenya, said, “We supply aerospace hydraulic tools and mechanical components to transportation systems in the US, Europe and Switzerland. The transportation costs through the sea have gone up due to the crisis in West Asia. The volume of orders placed has dipped by 30% to 40%.”

“Our foreign exchange reserves last week went down by $ 3.5 billion. This is an indication of the plummeting export business. From $701 billion per week, it dipped, instead of the usual trend of growth witnessed week on week,” said Dr Jacob Crasta, national executive committee member of the Federation of Indian Chambers of Commerce and Industry (FICCI). 

Elections in US also impacting exports from Karnataka

Sachin Sabnis, managing director, Belgaum Ferrocast India Private Ltd, Belagavi, said, “We export iron castings to North America and Europe, which are used for pumps in the oil and natural gas industry. The shipping route is through the Suez Canal and the West Asia crisis directly impacts transport of goods. Everything has slowed down.

From 100 tonnes each month, my exports dipped to just 60 tonnes in the last four months. The US elections next month too have reduced export orders from that country. Another issue is the shortage of containers. The 40-tonne containers are manufactured by China for the world.”

Uday Joshi of Mahalakshmi Engineering in Belagavi said, “We export automobile and hydraulic components to a company, which distributes them in the US. There has been a 30% dip in my business.”

MD Balakrishnan, who is into LPG business, said, “For my business, the Iran-Israel crisis does not impact. However, the Russia-Ukraine war has taken its toll on my business as India imports petroleum products from Russia.”

Israel giving good defence business now

Spacenex Aero Pvt Ltd based at Aerospace Park in Devanahalli is seeing a surge in its exports in the Defence sector. "We supply parts for Fighter Jets, the Iron Dome and Strategic Remote Control Guns among other equipments to Israel. Demand for these have gone up by two times and even three times in some cases. These are replaceable parts and the wars have spurred a demand for the same."

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