Exporters worried about future orders, want incentive issue to be resolved

The decline in India’s goods exports continued for the fourth consecutive month with outbound shipments in November falling 0.34 per cent (year-on-year) to $25.98 billion.

Major sectors such as petroleum products, garments, gems & jewellery, leather and carpets, many of them labour-intensive, have taken a hit.

Imports were down 12.7 per cent in November at $38.11 billion as all major items, with the exception of gold and pearls and precious stones, witnessed a decline, as per figures released by the Commerce & Industry Ministry on Friday. The sharper decline in imports helped bridge the trade deficit to $12.12 billion, compared to $17.58 billion in November 2018.

While export of items such as engineering goods, electronics, chemicals and pharmaceuticals increased in November 2019, exporters say that the global outlook remains challenging.

“'Though engineering exports have put up a reasonably good show with 6.32 per cent growth in November, the overall external trade environment remains challenging and subdued. We are working with the government to improve our competitiveness and hope that the issues raised by exporters, like the higher cost of basic raw material of steel, are addressed,”' said EEPC India Chairman Ravi Sehgal.

As per the revised projections of the World Trade Organization, world merchandise trade volumes are expected to rise by only 1.2 per cent in 2019, substantially slower than the 2.6 per cent growth forecast in April. The projected increase in 2020 is now 2.7 per cent, down from the earlier projection of 3 per cent.

Total exports for the period April-November 2019-20 were at $211.93 billion as against $216.23 billion in the same period last year, a fall of 1.99 per cent. Total imports for the period April-November 2019-20 at $318.78 billion, was 8.91 per cent lower than imports in the comparable period.

Trade deficit in the April-November 2019-20 was lower at $106.84 billion compared with $133.74 billion in the same period last fiscal.

Domestic issues, including uncertainty over export incentive scheme MEIS, were a major cause of concern as exporters’ claims are pending for over four months. This wiped out their liquidity and proved to be a hurdle in finalisation of new contracts, FIEO President Sharad Kumar Saraf pointed out.

He said the stalemate should end immediately and an alternative scheme should be announced with a three-months lead time to help exporters make the necessary adjustments.

Published On : 13-12-2019

Source : The Hindu Businessline