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Exports grounded, all eyes on FTP
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Bikky Khosla | 31 Mar, 2015
The export sector is not doing well. Overseas shipments fell for the third consecutive month in February by a record 15 percent to 21.5 billion. During the April-February 2014-15 period, cumulative exports stand at USD 286.58 billion, up only 0.88 percent over the same period last year. One of the major factors that has played spoilsport for the sector is dull global demand. In January, the IMF forecast that global growth would pick up from 3.3 percent in 2014 to 3.5 percent this year, but now the early signs are that growth may again be downgraded.
Indian exporters are already feeling the heat of lower global demand. A PHD Chamber survey, conducted during the months of February and March, has found that majority of exporters are facing a 20 percent decline in their order books for the coming times. They view that heavy dependence on the European markets, which still have not recovered from recession, and weakening prosperity in the US markets are the top external hurdles at this moment. Other issues pointed out by them include rapid rupee appreciation as compared to other developing economies and domination of low-cost Chinese products in the international markets.
Among the internal factors, exporters identify high operational and transactional costs, complex tax structure, high interest rates, inadequate incentives and difficulty in availing incentives, difficult custom procedures, like labour laws and tedious transportation processes and harassment by officials. At the beginning of the current fiscal year, every economic forecast for the year rested its case for economic revival to a large extent on promotion of exports, but unfortunately on this last day of the year, we find ourselves nowhere near where we thought we'd be. Exporters are still facing more or less the same problems as they did then.
In this scenario, it will be interesting to see what the new Foreign Trade Policy, scheduled to be released tomorrow, comes with. It has been reported that the commerce ministry is likely to consolidate a number of schemes to simplify the subsidy regime. I also expect that some new subsidies will be introduced. In addition, efforts should also be made to integrate the export strategy with the flagship initiatives like Make in India and Digital India. Also, the scope of the Focus Market Scheme (FMS) and the Focus Product Scheme (FPS) should be widened so as the push diversification. In addition, strong efforts should be directed towards conceptualizing more sensitive export-friendly policies based on the realities at the ground level.
I invite your opinions.
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availing subsidy....big problem..
Naveen | Mon Apr 6 06:38:50 2015
I applied for subsidy(under TUFS) more than one year back. my case was logged and passed and also status shows sent to ministry but i have not received anything till date. i feel that if incentives to anybody not given on time, they feel demotivated and do not give their 100 percent then be it an employee or an entrepreneur.
Internal factors are the most detrimental
Vikas Golchha | Sat Apr 4 03:36:06 2015
The third paragraph of your article spell out the pain of all exporters and importers. Among the big talks in the government there is no attention to the high cost once a consignments reaches the port for export or an import has to be cleared. It is clear that the government and bureaucracy does not have their ear to the ground. It is so ridiculous when one has to tranship material to another truck for just a few hundred metres just because an 'outside truck' can not enter so and so place. Our port expenses are 3-4 times that of China. This coupled with high interest rates, corruption, tedious paperwork and harassment discourages primarily domestic market oriented companies to venture into exports
Exports grounded, all eyes on FTP
PIYUSH KUMAR SINGH | Thu Apr 2 19:55:27 2015
My opinion on this subject is that market is under corrections now and the impact of recession will be over by the end of this financial year. We Indian has to take strong steps to come from the crisis of RECESSION with more focus on EXPORTS rather than imports. We should focus on MAKE IN INDIA project.
Global market
T. Cleary | Thu Apr 2 16:23:59 2015
In my opinion in order to improve exports quality must be improved and the standards for the country you are shipping to must be adhered to it is not wise to set your own standards and expect others that are established to conform to them. There has been a trust issue that has come from past experience that must be addressed. establishing actual representatives in the countries that you were shipping to would go a long way in allowing companies to trust that they will get what they are asking for.
Exports Grounded
Ian Gould. | Thu Apr 2 07:38:04 2015
Great excess of ongoing red tape in government, this unchanged regardless of endless talk to contrary. Moreover, Federal electives consistently refuse advice for streamlining.Thus it was, so it is and forever it will be.
export growth
Srivathsan.E. | Wed Apr 1 06:31:31 2015
I fully agree with the editorial that our Indian bureaucrats are the main hurdle for growth. They work in the same attitude as British DNA. they should feel they are Indians working for Indians and paid by Indians and live with Indians.
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