While the Gujarati population in Kenya reel under violence, exporters in the Saurashtra-Kutch region, too, are feeling the heat of the riots in the African country.
RAJKOT: While the Gujarati population in cities such as Mombasa, Nairobi and Kisumu in Kenya reel under violence, exporters in the Saurashtra-Kutch region, too, are feeling the heat of the riots in the African country.
"Exports pertaining to items such as machinery, automobile spares, petroleum products, iron & steel and plastics are also done from Gujarat," says Swapan Sinha, former exports manager with merchant exports firm in Rajkot. Largely auto spares, diesel engines from Rajkot and textiles from Jetpur are exported to this country, adds Sinha.
The other reason why exporters of Saurashtra are likely to face financial bruises is the terms and conditions according to which the businesses are undertaken. "Regular business terms and conditions with Kenyan importers follow the documents against payment (DP) and documents against acceptance (DA), a 90-day pattern which is highly risky," explains Sunil Lakhani, export committee chairman with Rajkot Engineering Association.
The trade pie of Indian imports with Kenya is marginally less when compared with other countries but if the situation continues it would create financial constraints for exporters from the region. The annual trade from Saurashtra region with Kenya is worth Rs90 crore, of which payments to tune of Rs 45 crore to Rs50 crore are likely to be outstanding considering the DA & DP business terms and conditions.
"Exim trade is done in 8-9 months keeping in view the seasonal cycle and monsoons in India usually halt exim trade for 3-4 months - so it would not make a major difference for exporters, but yes their financial capacity would get thinner if the situation deteriorates," explains Bhavin Patel, export consultant from Rajkot.
Even the demurrage charges slammed by shipping companies will affect exporters if the situation continues for more days because then there would be no one to release goods lying on the port and there are chances of mobs taking charge, explains Patel.
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