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Last updated: 23 Aug, 2017  

Exports.9.Thmb.jpg Exports slowdown

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Bikky Khosla | 22 Aug, 2017
The Commerce Ministry last week came out with export figures for the month of July. The data shows that our overseas shipments rose for the 11th consecutive month, recording a growth of 3.9 percent  over a year ago. That all sounds good, at least until we look at the export figures for the last few months. Exports growth stood at 27.6 percent in March, 19.8 percent in April,  8.3 percent in May and 4.3 percent in June. So, there has clearly been a loss in momentum, which needs to be addressed as a top priority. Otherwise, the hopes of a boost to the economy through exports revival, as reflected in the recent Economic Survey, may not take much time to fizz away.

More disturbing is the slowing pace of our non-oil exports. Shipments of non-oil goods have fallen in every month of the current financial year--2.67 percent in April, 1.10 percent in May, 2.67 percent in June and 6.47 percent in July. Additionally, while 19 out of 30 major product groups registered growth in July, decline in some categories, such as gems & jewellery, pharmaceuticals, engineering goods, carpets and RMG including textiles is not a positive sign. While the second volume of the Economic Survey stresses on the fact that India should have a respectable share of 5 percent of global exports, the current scenario does not look encouraging at all.

So, what are the factors responsible for this decline? The Rupee has appreciated for some time now while currencies of some of our major competing countries have depreciated during this period. Similarly, implementation of GST must contributed to this slowdown to some extent. But a recent report points out that domestic bottlenecks explain nearly 50 percent of this export weakness. It adds that nearly 60 percent of Indian exporters are mainly from the labour-intensive SME sector, which is at present facing some major challenges, including poor infrastructure, high wage costs and rigid labour laws, lack of ease of doing business and high interest rates, etc.

Additionally, the recent Economic Survey has suggested a number of steps, including national priority sector status to exports, greater states' participation, development on a 'war-footing' of world-class export infrastructure and logistics--especially port-related, demand-based export basket diversification rather than a mere supply-based strategy, FDI-linked and value-added exports--particularly high-tech exports, useful trade pacts with some major countries and more engagement with BRICS and ASEAN, etc. The Centre is scheduled to roll out the reviewed FTP in September, and it will be interesting to see what corrective steps it comes with for exports revival.

I invite your opinions.
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Export slowdown
Roopak Dhawan | Wed Sep 20 01:20:10 2017
GST has been a real negative effect on exporters . We have been exporting for last 20 years and we're getting Duty Drawback of 10% .till last time . Since we were already doing some local/domestic sales ( under 1.5 crores ) this we were not under excise as well . Companies under excise doing export of same products as us were getting 2.2% as drawback . After GST all drawbacks given to us are now 2.2% ( reason best known to government ) . This has resulted in decline of more the. 60% of our exports in Middle East sector which is highly competitive . If this issue is not addressed for companies like us I am sure we and many more companies will not be able to increase business for many years to come .

Export Slowdown
Binod Agrawal. | Mon Sep 11 07:18:53 2017
Mechant Exporters are baldly affected by the GST policy. They have to go for BOND/LUT which is a tedious task to get from the bureaucracy. Further Pay the GST 18% or 28% as the case may be and then export. Working capital is blocked by it. Export incentives is also very marginal.

Exports Slowdown
Mukesh Gupta | Thu Aug 24 05:27:16 2017
it is indeed a matter of great concern that something is done to boost the exports. My suggestion is to dismantle the entire bureaucratic infrastructure created for promotion of exports and the saved money can be spent on developing the infrastructure at Ports & Airports so that exporters do not face hurdles even after procuring orders...!

Exports Slowdown
Praveen Mathur | Wed Aug 23 13:19:51 2017
Labour laws should be eased out immediately, incentive scheme should be announced & the highest exporter in volume / profitwise should be awarded, business ruled to be eased out and labour worker should also be awarded / appreciated for the work and it should be monitored always, Infrastructure should be improved immediately with matched with the international standards and all the sops to be jotted down. thank only we can increase the exports. thanks & best regards

Problems of SME sector and Exports
yogesh jhalani | Wed Aug 23 10:55:10 2017
The policy of the govt is only for the large scale industries.The Govt has not done anything or thought of the SME sector at all although the potential of jobs growth and Exports growth is highest in this sector.Today SME sector is the most neglected sector as its coopetitive strength is being eroded every day.This Govt has never cared to look into the problems of this sector. Govt has been trying to protect the large industries by way protection prices of imports such as steel and other raw material producers.It results in the higher prices of raw materials in India means higher cost of production of the SME sector which normally operates in the value addition of basic raw materials in producing the finish product for Exports and local markets. Once SME gets costly raw material how can the compete with cheaper finished products specially from China and how can they be competitive in Exports. Further after GST all local traders have started to import there requirements in a big way because they can get the credit of GST straight way while previously they were not getting the credit of CVD. therefore the cost of imported product has gone down of the value added product by at least 12% which is hitting the SME sector in a very big way. The impact will be seen in a few months Signs are already there by way of increase in Imports specially from China.It further eroding the viability of the SME sector.Today Sme sector has no choice but to cut down in their activity level.

Impact of GST on Exports & Imports
Sujit Kadam | Wed Aug 23 10:31:16 2017
Relief Expected from Government: To allow Full Exemption of Duty on Imports for Export Purpose. Under EPCG SCHEME Relief Expected from Government: To allow Full Exemption of Duty on Imports for Export Purpose.under Advance Authorisation (AA)Scheme III) Transferable Scrips (TS) Relief Expected from Government:  To allow Full Duty Debit in the Transferable Licences.  To reduce the GST from 12% to 6% as earlier IV) Discouraging imports under JNPT Ports: For imports under EPCG scheme & Advance Authorisation Scheme a Bank Gaurantee has to be executed with the Customs. As per the Board Circular no.: 58/2004 the BG for New Manufacturing companies registered under Central Excise & with DIC/SIA is 15% of the Duty Saved Value. However the O/o the JNPT has issued a Public notice no.: 140/2016 stating that the BG for New Manufacturing Companies would be 100%. However it is very important to note here is that the Ports in Gujarat and other Ports accept 15% BG. Due to this the Imports traffic has been diverted from Maharashtra to Gujarat Ports by New Manufacturing units. Relief Expected from Government: The instructions issued by Board Circular No. 58/2004 has to be followed by Customs all over India. The Exporters, Manufacturers, Merchant Exporters, Traders are taking the blows of the Governments Lack of Interest & China’s brutal attacks on the Trade with their mouth shut. This has serious irreversible & adverse effect on our Country’s Exports

Exports Slow down
A.V. Chandran | Wed Aug 23 07:28:39 2017
It is an established fact that export stands declined whereas imports maintained continuous increasing return in view of crude oil with no weakness to internal economic mechanism to the Great Nation, India. If one and all recall the last three years imports of crude internal economic health of India was maintained extra ordinary growth as crude price was at continuous decreasing return and corresponding cost of petroleum products at increasing return as actual benefit to consumers were not shared based on continuous decrease in crude oil cost. Befitting review mechanism could be applied to compare the crude cost and corresponding cost of petroleum products and available surplus for the last more than three years. It will establish macro surplus funds whereas it is yet to disclose in the floor of the Parliament and it stands a hidden economic agenda of the running Central Government. Am I right?

Exports Slowdown
Ashok Bhatia | Wed Aug 23 05:55:40 2017
It's only the Government saying Growth in a exports. Ground reality is totally reverse. Due to GST Increased Rates especially on almost all household products as well as Critical Bond / LUT formalities, just check any such SME Industry which are really in very bad shape. Just wait for another 2-3 months, actual NEGATIVE GROWTH results will be there. At that time, I am sure the Govt. will start thinking to extend support or incentive to increase exports.

  Re: Exports Slowdown
Anoop K Mittal | Wed Aug 23 07:42:14 2017
Mr. Ashok Bhatia has hit the nail on the head.The Government think tanks are gloating in their own egos and mis-information feed to them by other government functionaries and are far removed from ground realities.They will wake up too late and than will not have any concrete plan to boost exports.Kindly wake up now and streamline GST rates to more realistic levels, as at times it is not possible to take input credit for GST on all inputs required for exports. Slowly the balance of payment will start getting negative for India, as other suppliers from other countries will take over our parties.

  Re: Re: Exports Slowdown
S. RAGHAVAN | Wed Aug 23 12:12:48 2017
Export Duty (IGST) is adding insult to the injury..BOND or LUT is no way a help for the exporters.. NO need to pamper the exporters at least stop punishing them. Duty draw back on import duties paid is another fun game..will it support Make in India?

Export growth
Pradeep Joshi | Wed Aug 23 05:48:07 2017
I have experience of more than 30 years in exports to Africa. Much progress can be made to boost Indian goods exports to Africa. I can take lead if permitted.

Decline in export
VIVEK SHARAN SINGH | Wed Aug 23 05:33:14 2017
There is steep decline in export in last two months specially in June & July month mainly due GST roll out and lack of information / update on way forward for exporters , specially there was huge dilemma on the textile industry who do outsourcing from domestic market and export on lack of process defined for exporters. Although there are many different other reasons like manpower and other issue that has impacted exports movement. The Government must take serious steps to encourage export and easing the process so that we can get back on track.

Declining exports
Subodh Jain | Wed Aug 23 05:00:36 2017
Our export policy and procedure is the root cause of ever decreasing exports. Poor incentives on exports govt. is not interested in people going for exports.

Export slowdown
Peter Paul | Wed Aug 23 03:43:22 2017
Not only export, import of essential capital goods as well as food processing machines have come down drastically. First by demonetization and now by GST. We pay totally 43% at the time of customs clearance as against previous 28.3% 2.5% on interstate sale as CST against for C. Even the small businessman are forced to pay Excise duty by force by introducing GST. Claim on input tax, God only knows when it will be reimbursed. Regards Peter Paul

HARVINDER SINGH | Wed Aug 23 00:56:06 2017
GST is main reason for slow down of export. margin is 7% due to competition with china and Taiwan GST 28% how we can com petite with other. Many exporters going to close their business. goons leaders think about themselves only. not for public, army & nation.

Export slowdown of SME and Merchant Exporters
Subrata Saha | Tue Aug 22 22:47:51 2017
Being Vice President of Federation of Association of Small Industries of India (FASII), WE WISH TO RAISE THE ISSUE OF PAYING FULL AMOUNT OF GST AT THE TIME OF PROCUREMENT DURING EXPORT, then WAIT FOR FORTY DAYS TO COMPLETE THE CYCLE TO GET IT BACK FROM Govt. Has suddenly DISCOURAGED ALL SMALL SCALE MERCHANT EXPORTERS WHO PLAY WITH LIMITED AND MAINLY BORROWED WORKING CAPITAL- 28% or 18% (according to slab of GST) investment has gone up overnight adding interest burden, while drop in value of US DOLLER has made lives difficult. Instead of ARE -1 form etc. Govt. Has failed to address this issue till now, this is absolutely whimsical and unprepared callous attitude of TAXATION AND GST POLICY MAKERS.

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