FIEO President says August exports felt headwinds, geo-political challenges
The Indian economy piping the UK to become the fifth largest economy has come as a booster and will further add to the enthusiasm of the trade and industry allowing them to perform in challenging situations, said FIEO President Dr A Sakthivel.
The Indian economy grew by 13.5% in the first quarter, April-June, of the current fiscal, data released by the National Statistical Office (NSO) showed on 1 Sept 2022.
Comparatively, this is the highest since the 20.1% expansion recorded during the same period last year when business activity began recovering from COVID-lockdowns.
“Demand for low-value products is increasing, helping our MSMEs,” he added in comments on the August export data release by the Ministry of Commerce and Industry.
Dr Sakthivel pointed out that buyers are moving from China, both as China is becoming costlier and less reliable with a zero Covid tolerance policy and as anti-China sentiments are gaining ground day-by-day, which itself is a very positive development in the medium to long-term.
He shared his market views as India’s August exports declined marginally due to global headwinds and supply-side disruptions because of geo-political uncertainties.
Headwinds in global trade and high inventories across the world as well as supply side disruptions due to Russia-Ukraine and China-Taiwan crisis has resulted in a 1.15% decline in August exports, he said.
Inflation is plaguing almost all economies as the purchasing power has dwindled, affecting the off-take and thus the demand is also showing signs of slowdown, he pointed out.
The slowdown in major economies across the world including China will further affect the overall forecast for the global growth process, he assured.
The export figures have also been affected as the prices of most of the metal and commodities are falling, which has resulted in value-wise export realization.
Overall, the April-August 2022-23 merchandise exports increased by 17.12% to US$192.59 billion over US$164.44 billion in April-August 2021-22. This increase continues to showcase the strength of the exports sector amidst challenging ongoing geo-political and rising global uncertainties.
Top sectors, which led the exports growth during the first 5-months of the fiscal were Petroleum Products, Engineering Goods, Organic & Inorganic Chemicals, Drugs and Pharmaceuticals, Electronic Goods, RMG of all Textiles, Gems & Jewellery and Rice. Labour-intensive sectors also contributed to the exports basket, which is a good sign, further helping job creation in the country.
Imports grew by about 36.78% during August. This has been mainly on account of Petroleum Products; Coal, Coke and Briquettes; Electronic Goods; Machinery, electrical & non-electrical; Organic and Inorganic Chemicals and Pearls, precious & Semi-precious stones; Artificial resins, plastic materials, etc.; Vegetable Oil and Iron & Steel may be looked into.
Crude prices have also added to the import bill of Petroleum Products, thereby to the import basket of the country, according to Dr Sakthivel.
He assured that the industry is working to reduce the imports by augmenting production. fiinews.com
