Global and domestic factors again pull-down monthly exports: FIEO
Says, protectionism and liquidity concerns coupled with spread of Coronavirus in China further worsened sentiment
Ludhiana: Responding to a nominal decline in January exports by 1.66 percent at USD 25.97 billion during the month, FIEO President, Mr Sharad Kumar Saraf said that global and domestic factors have again pull-down the monthly exports. Besides protectionism and liquidity concerns coupled with sudden spread of Novel Coronavirus in the world’s second largest economy, China has further worsened the global sentiment and exporters are delaying their shipments. Other key factors including trade war, tension between Iran and the US and slowdown in economies across the globe have also exaggerated the problem for India's exports sector, added Mr Saraf. FIEO Chief said that with major global players including China, which is now facing an epidemic like situation, is not only losing its sheen in exports, but has dented its economy in a big way. The Indian exports is also passing through a very tough and challenging times as the currency volatility besides fluctuations in commodities prices including that of crude have also led to the nominal increase in exports of petroleum, which is a major constituent of India’s exports.
Only 10 out of the 30 major product groups were in positive territory during January 2020 including electronic goods, drugs & pharmaceuticals, organic & inorganic chemicals, iron ore, oilseeds, ceramic products & glassware, man-made yarn/fabs/made-ups, cotton yarn/fabs/made-ups, handloom products have shown some positive or nominal growth. However, all other major sectors of exports including almost all labour-intensive sector of exports are still in negative territory. Further imports of USD 41.14 billion with just a marginal decline of 0.75 percent during the month has this time not come as a respite for the economy.
Mr Saraf said that domestic issues including uncertainty over MEIS Scheme has been a major cause of concern as exporters' claim for about 6 months are still pending, which has completely wiped out their liquidity and has kept them in doldrums with regard to finalising new contracts. The problem of risky exporters has further compounded the liquidity problem as their GST and Drawback claims have also been held up.
President FIEO reiterated that the stalemate over MEIS for apparels and made ups should be resolved immediately. Besides, RoDTEP should be notified with immediate effect for all the products with lead time of at least 3 months now so that exporters may factor the same in finalising new orders and making their transition to the new scheme smooth while continuing with MEIS in the interim period.