Declining trend in exports does not augur well for the economy with WTO lowering trade forecast as tensions unsettle world economy: Sharad Kumar Saraf, President, FIEO

Ludhiana, October 15, 2019: Responding to the sliding merchandise exports growth of -6.57 percent with USD 26.03 billion during September 2019, FIEO President, Mr Sharad Kumar Saraf said that declining trend in exports does not augur well for the overall growth of the economy.

Escalating trade tensions that has unsettled the slowing world economy have also led WTO to sharply cut their trade forecasts for both 2019 and 2020 to 1.2 and 2.7 respectively added FIEO President. The downside risks still remain high in the global economy and the projection for 2020 depends on a return to more normal trade relations said Mr Saraf.

The softening of commodities prices including crude, US-China Trade war, Brexit and developments in Iran, Turkey and other gulf nations has further aggravated the problem of the world economy. The uncertainty attached has also affected the flow of investment and added to currency volatility.

Only 8 out of 30 major product groups were in positive territory during September 2019 including electronic goods, drugs & pharmaceuticals, mica, coal & other ores, minerals including processed minerals, ceramic products & glassware and iron-ore sectors which showed some growth. However sectors like tea, spices and fruits & vegetables showed only marginal growth during the month. All other major sector of exports including almost all labour-intensive sector of exports besides petroleum were in the negative, showing such a decelerating trend. However imports of USD 36.89 billion during the month has again come in the form of some respite for the economy showing a decline of -13.85 percent.

Mr Saraf said that domestic issues including access to and cost of credit still remains a problem area for MSMEs and especially for merchant exporters, interest equalization support to all agri exports, benefits on sales to foreign tourists and quick refund of GST specially ITC refund should be quickly and seriously looked into. Further WTO complaint scheme of newly launched RoDTEP should be immediately deliberated and drafted to give a much needed boost to the exports sector.