'Jan exports figure do not augur well for future'

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SME Times News Bureau | 15 Feb, 2012
M Rafeeque Ahmed, President, FIEO has said that January exports figures clearly indicate that 2012 would be a difficult year for exports in view of growing uncertainty in the Euro Zone and slacking of demand globally.

Reacting to the trade data showing exports growth in January by 10.1 percent year-on-year to USD 25.4 billion, while imports increased by 20.3 percent to USD 40.1 billion in January 2012, resulting in a trade deficit of USD 14.7 billion, FIEO chief recently said that these figures clearly indicate that 2012 would be a difficult year for exports in view of growing uncertainty in the Euro Zone, slacking of demand in other advance economies and third country effect on our exports to emerging economies.

During April-January 2011-12, the country's exports increased by 23.5 percent to USD 242.8 billion. Imports grew by 29.4 percent to USD 391.5 billion during the 10 months period. The trade deficit stood at USD 148.7 billion for the period.

Ahmed said that trade deficit may touch USD 170 billion in view of crude prices moving northward and growing imports of gold and silver.

FIEO Chief suggested that Government should look at the ways and means for making exports competitive by reducing the cost of credit across the board for export sector or providing interest subvention of over 3 percent to bring the export credit to close to 7 percent.

Various tax matters including TDS on foreign agency commission needs to be clarified so as to remove any ambiguity and impart little competitiveness.

State Governments should provide expeditious refunds of the VAT paid on input used in exports. In the given circumstances, Ahmed demanded for stability of the Policy providing duty neutralization and promotional benefits of exports so as to sail through difficult times.

President, FIEO said that exports may be in the range of USD 285-290 billion this fiscal.