Negative export growth due to decline in global demand and fall in commodity prices
GN Bureau | April 26, 2016
Due to global economic slowdown, the export sector in India has been facing decline. In last two years the government has failed to achieve the fixed export target. The downfall has been noticed in commodities like crude petroleum, shipping, iron and steel, buffalo meat, fabrics and organic chemicals.
In the fiscal year 2014-15, export was only $310.3 billion, much lower than the fixed target of $340 billion whereas in 2015-16, no target was fixed and export went down to $261.1 billion.
The information was provided by Nirmala Sitharaman, Minister of State (Independent Charge) for Ministry of Commerce and Industry in a written reply in Lok Sabha on Monday.
According to Directorate General of Commercial Intelligence and Statistics, the negative export growth in the recent period has been due to fall in global demand and fall in commodity prices. It has impacted terms of trade for commodity exporters.
Petroleum products, one of the major items of export for India, have been witnessing decline due to fall in the prices of petroleum crude resulting in consequent decline in prices.
More so, European Union (EU) countries that account for nearly 16 percent of India’s export are facing stagnation. China is also experiencing a slow down. The recovery in US has been moderate and uncertain in terms of sustainability. Also, globally there has been increase in trade barriers has also been reported.
Efforts were also made to address country specific impediments through bilateral trade engagements. To reverse the current trend in foreign trade, the government has introduced Merchandise Exports from India Scheme (MEIS) in the Foreign Trade Policy (FTP) 2015-20, to incentivize export of merchandise which are produced/manufactured in India.
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