US-China tension may further worsen trade
Downward trend in labour-intensive sectors of exports not good for the economy, said FIEO President Ganesh Kumar Gupta, reacting to export growth of a mere 0.64% for April 2019.
The April export data of US$26.07 billion with a growth of 0.64% is not at all encouraging, he said.
Almost all the labour-intensive sectors including leather & leather products, gems & jewellery, engineering goods, cotton yarns/fabs/made-ups, man-made yarn/fabs/made-ups, carpets, marine products, few plantations and various other sector of exports dominated by MSMEs are into negative territory.
These sectors are still facing the problem of liquidity besides various other challenges including global trade war, protectionism, fragile global conditions and constraints on the domestic front.
FIEO Chief said that there may be front loading of exports in the past as exporters were apprehensive of withdrawal of GSP in US and development in Iran.
Only 14 out of 30 major product groups were in positive territory during April 2019 including petroleum, organic & inorganic chemicals, drugs & pharma, RMG of all textiles, electronic goods, ceramic products & glassware, handicrafts, commodities besides some plantation, agri and dairy products have shown positive growth during the month.
Gupta also expressed his concerns on the rising trade deficit primarily on account of swelling crude import bill with further northward movement of prices and ban on Iranian imports along with rising gold import.
He also opined that with rising trade tensions between US and China, the global trade scenario may further worsen, putting more pressure on Indian exports in months to come. The uncertainty attached to it will affect the flow of investment and add to currency volatility.
Gupta 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 exemption from IGST under Advance Authorization Scheme with retrospective effect should be seriously looked into.
Besides these, budgetary support for marketing and exports related infrastructure are some of the other key issues, which needs immediate attention of the government, he pointed out. fiinews.com