Weak rupee helps exporters

Indian exports hold a promising outlook on the US market which accounted for 16% of US$303 billion shipped in 2017-18, according to an industry paper.

“It is the largest market for Indian exports, both for merchandise and even services. So, when the US grows at its current pace, it augurs very well for the total Indian exports’ basket,” said the ASSOCHAM paper.

The US economy grew by 4.2% in the second quarter of this year, the best in about four years despite a tariff war with China.

India’s exports to the US showed a growth trend of over 13% in the last fiscal ended March 2018. With exception of June 2018, the same trend line is visible in the current financial year.

“In fact, going forward, this should only improve as rupee decline against the US dollar is resulting into higher realisations for the exporters at home, making them more competitive,” the chamber said.

A sharp drop in rupee may have caused a burden on the country’s import bill, but the net realisations for exporters have increased significantly, said the paper.

While exports have shown a growth of about 19% in dollar terms, the rupee realisations for the export shipments went up close to 30%, according to trade data for August 2018.

With further streamlining of exporters’ GST refunds, their competitiveness should also improve, helping them in the global market.

Engineering goods, chemicals, gems and jewellery are among the major items of exports to the US from India.

With the focus of the Trump administration on infrastructure build–up, the demand for Indian exports, particularly of steel and other engineering goods should increase.

Besides, with the festival season around the corner, the orders for the gems and jewellery should also look up, said the report sourcing data from the Director General of Foreign Trade. fiinews.com