Bikky Khosla | 18 Jun, 2019
Merchandise exports grew 3.93 percent year-on-year to $29.99
billion in May. Imports were 7.76 percent higher at $45.35 billion during the
month. While this moderate exports growth is a reflection of extremely modest
growth in global trade, what is more concerning is the swelling crude import
bill and increasing gold imports. Also, though some important sectors performed
well during the month, but all is not well with our exports as the latest
official figures show.
A look at the detailed data shows that some key sectors such
as engineering goods, iron ore and leather products did well in May, but
overall 13 out of 30 major product groups, including gems and jewellery, were
in negative territory. Also, exports growth, though helped by some hand-holding
by the government, is still at a sub-optimal level and MSME sectors are still
facing a lot of problems such as liquidity crunch and volatility in currencies.
Meanwhile, according to a news report, the government has
drawn up a strategy to benefit from the ongoing tariff war between the US and
China. The report adds that the Commerce Ministry has identified 203 products
where exports could be increased to the US, replacing Chinese goods, and 151
items where exports to China could rise. This is a timely step. There is no
doubt that protectionism is a bane for world trade, and to mitigate its effect
on our exports, we need to find a smart way out.
But constraints are there on the domestic front as well and
they need to be addressed urgently. An exporters' association has recently
raised concern about a number of issues such as inadequate access and high cost
of credit, lack of marketing support, poor export related infrastructure, etc.
There are many other issues. The Budget is ahead, and it offers an opportunity to
the Centre to bring in some comprehensive measures to help the sector.
I invite your opinions.