Bikky Khosla | 17 Jan, 2022
Merchandise exports for the month
of December fell by 12.2 percent to $34.48 billion against $39.27 billion
in the corresponding month of 2021. In contrast, imports fell to $58.24 billion
against $60.33 billion YoY. Trade deficit increased to $23.76 billion against
$21.10 billion YoY, but it narrowed to the lowest level in eight months from $23.89 billion in November. Overall, the foreign
trade environment is not that encouraging.
There is no doubt that weak
global demand has continued to weigh on India’s exports. Majority of economists
are anticipating a global recession in 2023. Geopolitical tensions, volatility
in currencies, high inventories – these are some major challenges our exporters
are struggling with for quite some time now, and unless this situation improves
drastically, the coming months would be extremely difficult for the sector.
The Budget is ahead, and it is an
opportunity for the government to take comprehensive cushioning measures for
the sector. According to industry watchers, this situation demands urgent steps
to ensure easy liquidity at competitive cost. Extension of ECLGS,
IGST exemption on freight on exports, PCFC extension, notification of
RoDTEP rates are some of the major suggestions put forward by experts in this
regard.
Meanwhile, engineering
goods exports have suffered the brunt of the weak demand in advanced economies.
Latest data shows that exports from the sector fell 12 percent
to $9.08 billion in December, 2022 against $10.30 billion in December 2021. Considering this as well as the
dim global economic outlook for 2023, the Centre should come up with a comprehensive
policy to arrest this downfall.
I invite your opinions.
