Global uncertainty affects investments

The US-China Trade war, Brexit and developments in Iran have further aggravated the problem of the world economy, noted Sharad Kumar Saraf, President of the Federation of Indian Export Organizations.

“The uncertainty attached has also affected the flow of investment and added to currency volatility,” he said in comments on the -6.05% slide in Indian exports in August 2019.

The softening of crude, steel and other commodities prices also pulled down exports, he noted.

Only 8 out of 30 major product groups were in positive territory during August 2019 including electronic goods, iron-ore, ceramic products & glassware, mica, coal & other ores, minerals including processed minerals, marine products, cashew, species and tea.

Rest all major sector of exports including almost all labour-intensive sector of exports besides petroleum were in the negative showing such a decelerating trend.
“The slowdown in chemical and plastics exports are particularly worrisome as we were growing in these sectors,” he said.

He also highlighted -13.45% decline in imports. Such a de-growth in imports has come after August 2016-17. However, profile of imports would suggest whether it has any bearing with domestic slowdown.

Saraf said that domestic issues including access to credit, cost of credit especially for merchant exporters, interest equalization support to all agri exports, benefits on sales to foreign tourists and quick refund of GST specially ITC refund should be seriously looked into.

Further WTO complaint schemes addressing cost disabilities of Indian economy should be immediately deliberated and drafted so as to replace some export promotion instruments to give a much needed boost to the exports sector, he said on 13 August 2019. fiinews.com