Exports from SME-dominated sectors fall in April

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SME Times News Bureau | 11 May, 2012
Exports from some key industrial sectors dominated by small and medium enterprises (SMEs) fell sharply in April, official data released Thursday showed.

According to foreign trade data released by the Ministry of Commerce & Industry, there is a sharp decline in exports of some SME dominated sectors, like gems & jewellery and ready-made garments in April.

The gems & jewellery sector witnessed the sharpest fall, with 25.7% contraction in overseas shipment during the month, followed by readymade garments that suffered 9% fall in exports during the same period.

The leather sector also saw muted demand in April, growing at a slow pace of 3.2%, while exports from electronics and plastic sector registered only 5.4% and 2.7% growth, respectively.

Exporters' body FIEO termed this sharp decline in exports of labour intensive sectors "disturbing". "This will have serious implications on employment and may lead to sharp reduction in additional job creation and even lay off," said FIEO President M Rafeeque Ahmed in a press statement.

He added that figures also underline the fact that there is no direct relationship between exports growth and depreciation, and stable exchange regime is more beneficial for exports rather than high volatility in the exchange market.

Reacting to the trade data for the month of April, showing miniscule growth of about 3.2% to 24.5 billion, coming on the heel off negative growth in March, Ahmed cautioned that the impact of global contraction in trade is now being felt by India as well.

"The situation is more grim now as in the past periods of slowdown, the emerging and developing economies exhibited positive growth helping us to increase our exports through market diversification strategy focusing on Latin America, Africa, and Asia," he pointed out, adding that the slowdown in new markets will be more obvious in next few months.

In the view of this, Ahmed said, the Centre devise suitable strategy to counter the export slowdown in the revised edition of the Foreign Trade Policy.

The FIEO chief asked for continuance of export benefits with increased entitlement and immediate re-introduction of Interest Subvention.

The industry body, however, expressed satisfaction with the decline in Gold & Silver imports (-33%) which will help in managing the increasing trade deficit.

In April, India's imports rose 3.8 percent, lowest during last 12 months. Import grew over 3 per cent in comparison to nearly 25 per cent in March 2012.