FIEO sees export slowdown as global inventories are pretty high
India is benefiting from rising demand for low-price products while buyers are moving away from sourcing supplies out of China, according to FIEO President Dr A Sakthivel.
Commenting on the July exports, he also reiterated that the benefits of newly signed FTAs and the PLI Scheme offers during the fiscal.
India’s July exports declined marginally amidst measures to control inflation, disruptions in global supply chain and geo-political uncertainties, he observed.
July’s US$35.24 billion shipments were off by 0.76% on the year due to inflation and the continued disruptions of supply chains caused by the Russia-Ukraine conflict, noted Dr Sakthivel.
Signs of a likely slowdown in exports can been seen as global inventories are pretty high and the merchandise exports is facing the triple whammy: i) there is again a shift in consumption from goods to the services with opening up of economies after Covid-19 pandemic; ii) the inflation reducing the purchasing power in all economies and iii) the growing impact of recession.
The reduction in voyage time, with normalization of Covid disruptions, have also added to the inventory hike as goods are reaching the US West Coast in 60 days as to 150 days, according to FIEO chief.
The export figures have also been affected by falling prices of most metal and commodities, resulting in lower value of exports.
Meanwhile, FIEO has expressed concern about increase in imports. India’s July 2022 merchandise imports were US$66.26 billion, an increase of 43.59% over US$46.15 billion in July 2021.
This increase was mainly on account of Petroleum Products; Electronic Goods, Coal, Coke and Briquettes; Machinery, electrical & non-electrical; Organic and Inorganic Chemicals and Pearls, precious & Semi-precious stones; Artificial resins, plastic materials, etc.; Vegetable Oil and Non-ferrous metals may be looked into.
Higher crude prices have also added to the import bill of Petroleum Products, adding to the increase in import basket, added Dr Sakthivel. fiinews.com
