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

Changing weather patterns, climate change responsible for Nepal floods

The interaction between active Western Disturbances, increased atmospheric moisture and the region’s complex topography aswell as global warming are important factors behind intense rainfall in the Himalayas, leading to flash floods in Nepal, according to meteorologists. Nepal

A right she cannot reach

Last summer, the two of us spent several weeks in rural Madhya Pradesh with a non-profit that works on gender justice through women’s self-help groups. We went in with a notebook full of laws. The Protection of Women from Domestic Violence Act. The Dowry Prohibition Act. Free legal aid for every wo

Tier-2 cities lead India’s digital credit push

Digital payments have become a reflex for urban India, but the confidence earned in paying has not yet carried over to borrowing. That is the central finding of `How Urban India Pays Report 2026`, released by Pahlé India Foundation in collaboration with Amazon Pay. Based on a survey of 5,149 consu

India calls for doubling bilateral trade with UK by 2030

Commerce and industry minister Piyush Goyal has called upon businesses in India and the United Kingdom to translate the opportunities created by the India-UK Comprehensive Economic and Trade Agreement (CETA) into expanded trade, investment, partnerships and job creation. Addressing the Bu

Gandhian movement after Gandhi failed: Ram Guha

The Gandhian movement in India, after Gandhi’s death, failed, says Ramachandra Guha, and blames Vinoba Bhave for it. But the movement found new, fertile grounds around the world and succeeded in bringing about a change in South Africa, the US and elsewhere. It is high time it returned home. Of cour

When religion, politics and Bollywood come together

Tavleen Singh, noted journalist and political commentator, has turned to fiction, with her debut novel ‘The Actor’ (HaperCollins India). Set in the near future, it has a superstar, Amit Singh, turning to politics, when the political landscape is dominated by prime minister Guru Gaynendraj

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter