India’s export has been witnessing downward trend for the past nine months
By Sai Nikesh D
India’s exports registered a 20.66% decline in August with total value standing at $21.26 billion against $26.80 billion during the same month of the previous fiscal.
Imports during the period were valued at $33.74 bn, which is 9.95% lower than the level of imports valued at $37.47 bn in August, 2014. Trade deficit widened to $12.47 billion mainly due to 140% rise in gold imports last month as compared to the August import of the last year.
However, the deficit narrowed compared to that of July. The country’s export has been witnessing downward trend for the past nine months.
Expressing concern over the continuous fall in the outbound shipment, Anupam Shah, Chairman of the Engineering Export Promotion Council (EEPC), said, “The situation has deteriorated further by major troubles in China. We are in for a tough time, making it imperative for the government to work with the exporting community to sail through difficult waters of global trade and there is no immediate hope for revival either.”
S C Ralhan, president, Federation of Indian Export Organisations (FIEO), attributed the downfall to “softening of prices of key agricultural and industrial inputs coupled with contraction in global demand”.
According to the government data released on Tuesday, exports of engineering goods declined by 29.09%.
While the shipment of leather items fell by 12.78 %, petroleum products export slumped by almost 48%.
According to FIEO, increase in duty on steel products without corresponding increase in drawback rate was the main reason for decline in engineering goods. Ralhan asked for the implementation of interest subvention and other benefits for exporters to increase their liquidity and enhance competitiveness in the global market.
“Government should have immediate consultation with export bodies and leading exporters to draw a road map for exports in such challenging time, in which reaching last year’s exports figure looks difficult,” he said.
The government data showed that the cumulative value of both exports and imports also registered a negative trend during April-August period of the current financial year.
While exports registered a negative growth of 16.17%, imports witnessed a negative growth of 11.61% year-on-year during April-August period.
This article was published in The Dollar Business on September 16, 2015