Soft commodity prices have also pulled down value-wise exports, says Dr Sakthivel
Sluggish global demand with growth contraction and softening of commodity prices has led to continuous decline in Indian exports, says FIEO President Dr A Sakthivel.
India’s overall exports (Merchandise and Services combined) in July 2023 is estimated to be US$59.43 billion, exhibiting a negative growth of (-)5.06% over July 2022, the Ministry of Commerce and Industry said on 14 Aug 2023.
Overall imports in July 2023 is estimated to be US$67.77 billion, a negative growth of (-)12.92% over July 2022.
Responding to the overall July export figures, Dr Sakthivel said, “Sluggish global demand specially in economies like China and EU coupled with the contraction in growth has led to the continuous decline in exports during the recent months.
“Manufacturing across the Euro Zone and the US has contracted due to persistent policy tightening measures by both the US Fed and the European Central Bank squeezing finances with also Britain’s pace of decline steepening as optimism faded.”
Further, with Asian economies showing mixed bags, economies across the continent struggled to maintain the momentum, he continued.
“The softening of the commodity prices has also pulled down value-wise exports. A large number of countries are showing such decline including China whose exports also contracted almost similarly in July 2023.”
One of the main key reasons for moderating pace of growth in merchandise exports significantly in 2023 has been because of ongoing geopolitical tensions, disruption in global supply chain due to Russia-Ukraine war, monetary tightening and recessionary fears, which has continuously led to a fall in consumer spendings across the globe especially in advanced economies, reiterated FIEO President.
“We are of the view that exports will start showing better growth numbers, as things are expected to improve in the next few months with fresh orders or order bookings for the festival and New Year season beginning to come.”
Eleven out of 30 key products sectors, which have shown positive growth during the month of July 2023, include ceramic products & glassware, electronic goods, drugs & pharmaceuticals, iron ore, fruits & vegetables, oil seeds, oil meals, cotton yarn, fabs, made-ups, handloom products etc., cereal preparations & miscellaneous processed items, rice and coffee.
FIEO Chief said that though the decline in imports is a good sign for the country, he has expressed concern about de-growth in key export sectors like petroleum products, gems & jewellery, organic & inorganic chemicals etc.
He has further reiterated that the need of the hour is to provide further momentum to the economy through easy and low cost of credit to the MSMEs, marketing support for promoting Brand India products and services globally and GST exemption on Freight on exports.
Besides, the interest equalisation support across all sectors of export and providing further extension to the Emergency Credit Line Guarantee Scheme by one more year till March 31, 2024, will provide much needed cushion during such tough and challenging times, said Dr Sakthivel. Fiinews.com
