Exports down 16 pc in June, FIEO urges Centre to act

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SME Times News Bureau | 16 Jul, 2015
Merchandise exports declined further for the seventh straight month in June to $22.29 billion which was 15.82 percent lower than the $26.48 billion worth shipped in the like month of last year, official data showed on Wednesday.

According to the data furnished by the commerce and industry ministry, imports during the month under review fell by 13.40 percent at $33.12 billion.

Trade deficit during June declined by 7.95 percent on a year-on-year (YoY) basis and stood at $10.82 billion from $11.76 billion in the corresponding month of last year.

Exports remained almost static compared to last month's figure of $22.34 billion, continuing the declining trend for the sixth straight month, caused by the global economic slowdown, fall in crude oil prices and appreciation of the rupee.

Cumulative exports for the period April-June 2015-16 at $66.69 billion registerd a 16.75 percent decline over that in corresponding quarter ($80.11 billion).

Oil imports in June at $8.68 billion dropped almost 35 percent over the same month last year. Non-oil imports at $24.44 billion also fell over June of last year by 1.85 percent.

India posted exports of $310.5 billion in 2014-15, that fell short of the fiscal's export target of $340 billion.

Expressing his disappointment over continuous seven months decline in exports, C Ralhan, President, Federation of Indian Export Organisations (FIEO) said that the government should engage with stakeholders, reintroduce interest subvention and support export marketing to steer exports.

Ralhan said that while soft external demand is the main cause but the slowdown in manufacturing (manufacturing growth in May was a moderate 2.2%), strengthening of Indian Rupee against USD at a time when other currencies have weakened substantially, high cost of credit and increasing logistics cost contributed in no less measure.

He added while external conditions may improve from September, yet the domestic constraints have to be addressed to bring exports back on track.

"Most of the sectors which have exhibited a decline in the month of May,2015 have shown even deeper negative trend in June, 2015. One of the reasons for the same was exceptional performance by sectors such as petroleum products, engineering, leather & leather products, marine products where they exhibited a growth varying between 15% - 40% in June,2014. The base effect will turnout to be in our favour from September, 2015," the FIEO chief added.

He urged the Government to engage with exports organisations to discuss measures which should be undertaken to boost exports. The Interest Subvention for exports should be released immediately as the inordinate delay is dampening the spirit of exporters which is otherwise low also due to global conditions, he said.

FIEO also reiterated that Government should focus on aggressive marketing, which is pursued by China, to showcase Indian products and the fiscal support will go a long way in increasing exports particularly of MSME whose share remained around 40% for last few decades.