According to a report by Crisil Ratings, the analytical company, a slowdown in advanced economies including the US and the Eurozone in 2023, is expected to make India’s footwear and leather export trade vulnerable.
The report titled The Slowdown Shadow further said, “Domestic labour-intensive sectors such as textiles, footwear and leather depend significantly on these two regions, making them particularly vulnerable to a slowdown in these economies.”
Economists and experts have predicted a global slowdown in 2023 as a result of the manifestation of continued tightening of monetary policies across the globe. In such a scenario, a slowdown in the economies of the US and Europe, which are the largest destinations for Indian exports, would lead to a lowered demand for those exports.
“Advanced economies are expected to bear the brunt as they aggressively pursued monetary tightening in 2022,” Crisil said.
Crisil also added that the forecast of a global slowdown is worrisome since, over the years, India’s growth cycles have become highly synchronised with the advanced economies of the US and Europe.
“It is noteworthy that labour-intensive categories such as leather articles, footwear and textiles have the highest export dependence on these advanced economies,” the report added.
