Negative growth in key export sectors worrying: FIEO

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SME Times News Bureau | 18 May, 2015
Sharp decline in Petroleum exports is the main reason but equally worrying is negative growth in some key export sectors, said S C Ralhan, President, Federation of Indian Export Organisations (FIEO).

Commenting on the merchandise trade data for April, 2015, Ralhan Saturday said that negative growth in exports is continuing since December, 2014 though the decline has come down from 21 percent in March, 2015 to 14 percent in April, 2015. The prime reason continues to be softening of crude, metal and commodity prices.

Petroleum exports is still showing a decline of 46.5 percent which itself is responsible for an overall decline of 9 percent, as the sector used to contribute to 20 percent of country’s exports.

Decline in exports of rice, marine products, meat, dairy & poultry products, leather & leather products are of equal consequences as these sectors have shown great promise in the past.

Equally worrying is negative growth in Gems & Jewellery, Electronics and Plastic goods as domestic capabilities are being augmented in these sectors.

However, increase in exports of Engineering, Handicrafts, Carpets, Pharmaceuticals, Organic & Inorganic chemicals is very positive development as most of these sectors were exhibiting a decline from Jan, 2015 onwards.

Ralhan said that while country-wise exports figure for April are not available, yet he feels that our exports to countries dependent on oil, metal and commodities exports may have taken a hit as they reduced their appetite for imports with tighter capital control.

President, FIEO said that while trade deficit has gone up marginally from USD 10.08 billion to USD 10.99 billion in April, 2015 as compared to the same month last year but a closer analysis of non-oil imports is required to see the constituent of imports as higher imports of raw-materials and capital goods may indicate little revival in manufacturing.

Ralhan said that the Interest Subvention Scheme may be re-introduced immediately and liquidity crunch of the exporters may be addressed with timely release of the exports benefits.