Sluggish global economy, says FIEO Prez
Trade tensions and rising protectionism has led to a marginal 1.1% decline in October 2019 exports, which totaled US$26.38 billion, according to FIEO President Sharad Kumar Saraf.
Further this decline may also be attributed to the base year effect as compared to October 2018, when exports grew by about 18%, he pointed out.
Sluggishness in the economies across the globe coupled with Trade War between US-China, Brexit and developments in Iran, Turkey, Iraq other gulf countries that has continuously unsettled the slowing world economy have further escalated the problem, said Saraf.
The downside risks still remain and the projections for the near future depends on a return to more normal trade relations among countries, believes Saraf.
The currency volatility, softening of commodities prices including crude prices have also led to the decrease in exports of petroleum products, which is a major constituent of India’s exports.
Only 12 out of the 30 major product groups were in positive territory during October 2019 including electronic goods, drugs & pharmaceuticals, Gems & Jewellery, Engineering Goods, Marine Products, Organic & Inorganic Chemicals, Iron Ore, Handicrafts Excl. handicrafts carpets, Jute Mfg including Floor Carpet and few plantation sectors which showed some growth.
However, few of the export sectors have started showing some positive trend during the month. All other major sector of exports including some labour-intensive sector of exports were still in negative territory.
Further US$37.39 billion imports with a growth of -16.31% during the month has once again come as a big respite for the economy.
Saraf said that domestic issues including uncertainty over MEIS Scheme is a major cause of concern as exporters’ claim for over three and half months are pending, which has wiped out their liquidity and kept them in doldrums with regard to finalising new contracts.
The problem of risky exporters has also compounded the liquidity problem as their GST and Drawback claims have been held up.
Further WTO complaint scheme of newly launched RoDTEP should be notified with the rates for the products with lead time of 3 months so that exporters. This may help exporters factor it in when finalising new orders and make transition to new scheme smooth. fiinews.com