Jaitley should forget Sushma and arrest decline in exports

Exports have been down for the last six months and exports demand govt intervention

GN Bureau | June 17, 2015


#arun jaitley   #sushma swaraj   #finance minister   #exports   #imports   #us   #US  

Finance minister Arun Jaitley has left for the US on Tuesday to hold multi-city economic road shows to sell India’s growth story after vigorously defending his cabinet colleague Susham Swaraj, who is at the centre of Lalit Modi controversy. Jaitley has a quite a job on his hands as India’s exports declined a steep 20.19% in May to $22.35 billion, the sixth consecutive month of contraction.

His work is cut out as the US is the largest market for Indian exports while it ranks sixth in terms of FDI between FY01 and FY15. In FY15, India had a trade surplus of $20.5 billion with the US while FDI from there stood at $1.82 billion.

The exports have been on the downslide for the last six months due to a softening of crude oil, metal and other commodity prices, besides weak demand in major overseas markets such as China, the Opec and euro zone, a relatively stronger rupee and domestic bottlenecks.

On imports front, the underlying weakness in the domestic manufacturing sector and tepid domestic demand has resulted in imports declining by 16.52% in May, a 15-month low (the lowest since 17% contraction in February 2013). It was for the sixth consecutive month that imports remained in the negative territory.

This means a trade deficit of $10.4 billion, the third consecutive month it remained above the $10-billion mark, marginally down from $11.79 billion in March (which was the highest since November 2014) and $11 billion in April.

Meanwhile, the Federation of Indian Export Organisations (FIEO) on Tuesday urged the central government to check sharp decline in merchandise exports as it expressed concern over the widening trade deficit.

"The continuous negative growth in exports since December 2014 is a serious concern for all stakeholders, as the decline has exasperated to 20 percent till date this month," FIEO president SC Ralhan said in a statement.

He said emerging economies particularly of Asia are contracting due to slowing down of China, adding that Indian exporters are losing out their competitiveness due to high logistics cost and ground level transaction costs.

On the hand, industry body Assocham said given the current trend, exports touching even the $300 billion mark this fiscal would be a tall order. Exports had missed the target of $340 billion last fiscal and could touch only $310.5 billion.

"Decline in exports of engineering goods, gems and jewellery, organic and inorganic chemicals, drugs and pharmaceuticals, leather and leather products, electronic goods and plastics and linoleum are of equal concern as these sectors have either shown further dip or have moved into negative territory," Ralhan said.

Adding to the woes, the services sector had also declined in exports and imports by 5 percent and 20 percent in April of 2014-15 compared to the like period in 2013-14.

Comments

 

Other News

Uddhav Thackeray resigns as chief minister of Maharashtra

Minutes after the Supreme Court ordered a floor test on Wednesday night, Uddhav Thackeray in a televised address resigned as the chief minister of Maharashtra and also as a member of legislative council (MLC). He later drove down to Raj Bhavan and tendered his resignation to the governor Bhagat Singh Koshi

Gig workforce expected to expand to 2.35 crore by 2029-30

The gig economy has arrived in India, as the Covid-19 pandemic has propelled a flexibility of employment. As many as 77 lakh workers were engaged in the gig economy, constituting 2.6% of the non-agricultural workforce or 1.5% of the total workforce in India. The gig workforce is expected to expand to 2.35

How Antyodaya Saral is simplifying everyday life in Haryana

From obtaining an electricity connection to a driver`s licence, ration card, or old-age allowance, delivery of government schemes and services is an aspect of governance that impacts citizens at various points throughout their lives. The Haryana state government provides over 600 such schemes and services.

A blueprint of India’s economic future: From a former RBI governor

From Dependence to Self-Reliance: Mapping India’s Rise as a Global Superpower By Bimal Jalan Rupa Publications, 184 pages, Rs 695 Bimal Jalan, a former governor of the Reserve Bank of India (RBI), has been one of our finest commentators on econom

Carbon neutrality: distant dream or a possible future?

While many countries have been chasing to reach the carbon neutral status, only a few seem to be living up to their pledges as of now. The famous ’Paris Agreement’ of 2015 was glorified and celebrated that finally 196 countries have united with an intent to mitigate and reduce the greenhouse ga

Agnipath: benefits and challenges on the path ahead

The government this week announced the Tour of Duty or `Agnipath` scheme for the recruitment of soldiers in the armed forces. Under this scheme new soldiers will be recruited only for four years. This radical and far-reaching scheme has attracted mixed reactions from various quarters. While some officials

Visionary Talk: Sanjay Pandey, Mumbai Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter