Exports have been down for the last six months and exports demand govt intervention
GN Bureau | June 17, 2015
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.
With Lockdown 4 ending Sunday, the home ministry has issued new guidelines to fight COVID-19 and for phased re-opening of areas outside the Containment Zones. The guidelines, issued based on extensive consultations held with states and UTs, will be effective from June 1 till June 30. The first phase of reo
When the whole world is fighting COVID-19, food and nutrition security has become a major issue. The pandemic has aggravated the existing food crisis in India, especially in rural and tribal regions. There has been less availability of fresh foods in most parts of the country, and the tribal community has
India is determined to “set an example” for the rest of the word in the post-pandemic economic revival, prime minister Narendra Modi has said, underling the need to become self-reliant. “There is also a widespread debate on how the economies of various countries, including
Close to 48 lakh migrant labourers have been able to reach home from the cities they were working in, as the Indian Railways have run a total of 3,543 “Sharmik Special” trains from May 1. Following the home ministry order regarding the movement by special trains of migrant worker
Before the novel coronavirus hit it, Mumbai about 10-12 lakh labourers from elsewhere had made it their home. The figure for the state of Maharashtra was another 18-20 lakh. As the pandemic spread and the Maximum City emerged as the worst-hit place in India, all economic activities came to an end, and with
For the rest of the world, it is not easy to understand China when it comes to politics or economics. Under pressure from the international community, it has accepted to open the country for a “comprehensive” probe into the origin of the deadly coronavirus. But it is not clear whether the Asian