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Last updated: 20 Feb, 2018  

Exports.9.Thmb.jpg Exports: Time for govt to step in

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Bikky Khosla | 20 Feb, 2018

Exports for the first month of the calendar year 2018 stood at $24.38 billion. The latest data released by the Commerce Ministry can be interpreted in two ways. Year-on-year, there is a 9.07 percent growth from $22.35 billion reported for January, 2017, but compared to the previous month of December, 2017, when exports reached $27.03 billion, there is a decline of 9.80 percent. For October and November, exports had stood at $23.09 billion and $26.2 billion. So, the trend of growth is not that encouraging.

Besides, there are some other concerns as well. First and foremost, highly SME-populated and labour-intensive sectors like garments, carpets, handicrafts, man-made textiles are not showing growth. Among them, fall in exports of cotton textile by 16 percent y-o-y, apparel by about 14 percent y-o-y and man-made textiles by 7 percent y-o-y is particularly depressing. Additionally, petroleum product exports contributed nearly 6 percent to the total export figures in January.

Trade deficit for January is also at an alarming level. It reached near a 56-month high of $16.3 billion in January, against $9.90 billion in January, 2017. This increase is mainly due to a 26.1 percent increase in imports to USD 40.68 billion driven by increased inbound shipments of crude oil. During the first 10 months of the financial year, the gap expanded to $131 billion against $88 billion during the same period a year ago. If this trend continues, trade deficit in this fiscal may touch US$ 150 billion. So, urgent steps should be taken before it becomes too late.

Meanwhile, exporters have complained that delays in refund of input tax credits are hurting growth of the sector. In this background, an exporter’s body has also urged the government to look into the refund issues seriously and undertake a clearance drive to clear all cases by 31 March, 2018. Recently, the same organisation had also pointed out that exports credit had shown a decline of -2.5 percent in 2016-2017 and a y-o-y decline of -8.7 percent in 2017. These concerns worth paying attention to reverse further slippage and ensure a growth trend in the sector.

I invite your opinions.

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