Sakthivel in New Delhi on Tuesday. (PTI)

New Delhi, Jan. 6: Exporters today said the government’s recent sops might not stem the rot.

Already, exports fell 12.1 per cent and 9.9 per cent in October and November, respectively, while initial estimates for December are of a decline by 1.6 per cent.

The Federation of Indian Export Organisations (Fieo) warned of units shutting down and a probable loss of 10 million jobs in jewellery, leather, textiles, engineering and handicrafts.

“Negative growth trends will continue in December and in the next couple of months, unless the government announces major policy initiatives,” A. Sakthivel, newly elected president of Fieo, told reporters. The final figures for December will be announced later.

He said exporters were facing new challenges because of the financial crisis. Fresh orders were drying up because of lower demand and buyers were cancelling earlier orders or rescheduling their shipments.

“We will be nowhere near the export target of $200 billion unless the government considers a special package for exporters,” Sakthivel said.

Of the projected job loss of 10 million, one million will be in textiles.

About 7.5 lakh workers in gems and jewellery units will be affected, while 1.5 lakh leather workers may face the axe.

The Fieo president has demanded an additional 2 per cent interest subsidy over and above what is provided in the stimulus package. Exporters pay 7 per cent interest, while another 2 per cent is the subsidy.

“Export credit is available to our South Asian competitors at less than 5 per cent,” Sakthivel said.

Exporters have been demanding the abolition of the income tax on profit, release of benefits in a time-bound manner, delinking of benefits from realisation, settlement of derivatives losses, besides a moratorium on term loans.

“There has been no serious consideration in the second stimulus package except for the extension of DEPB scheme up to December 31, 2009. This is a routine announcement,” he said.

DEPB stands for duty entitlement passbook and is an import duty refund scheme.

The Fieo president said he did not see positive trends emerging before the fourth quarter of 2009.