SME Times News Bureau | 18 Aug, 2018
association FIEO has raised concern over the slowing pace of exports growth
though overseas shipments from the country again showed double-digit growth in
Reacting to exports data for July, FIEO
Kumar Gupta said that consecutively for third month in a row exports have shown
double-digit growth, however the rate of growth has declined.
MSME units particularly
labour-intensive sectors such as marine products, RMG of all textiles, cotton
yarn/fabs/made-ups, agri products, leather & leather products and Handicrafts
are into negative territory, he said.
Though some of the labour-intensive
sectors including gems & jewellery, carpets and jute manufacturing
including floor covering etc. have either shown impressive growth or have
improved, he added.
The main reason behind the
impressive growth shown by gems and jewellery exports have been the increased
import of gold and pearls, precious & semi-precious stones.
SME sectors of exports are still
reeling under pressure because of the liquidity crunch as banks and financial
institutions have continuously been tightening their lending norms and ITC
refund for exports still poses a challenge, said the FIEO President.
Gupta added that significant
contribution in the growth was made by petroleum, gems & jewellery and
engineering sector of exports, as they not only outperformed all other sectors
of exports but has also helped the exports sector to continue on its
double-digit growth trajectory in these difficult times.
21 out of 30 major product groups were in positive territory during July.
Besides petroleum, gems &
jewellery, and engineering goods, organic & inorganic chemicals, electronic
goods, plastic & linoleum and drugs & pharmaceuticals etc. have also
shown positive exports growth during the month.
FIEO President again reiterated his concern on the rising trade deficit,
primarily on account of swelling of crude imports bill due to rising global oil
prices, which have further added to inflationary conditions and the current
account deficit thereby adding to the woes of the government on the fiscal
This is also adding pressure on
Indian Rupee coupled with huge withdrawal by FIIs from the Indian debt &
Gupta said that on domestic front, key issues like depreciating rupee, access
& cost of credit especially for MSMEs should be looked immediately as
global challenges and increasing protectionism, have already added to the
problems of the exporters.
FIEO also urges the government to
soon come out with WTO compliant export strategy to give a boost to country’s
The Rupee depreciation would definitely provide some edge to Indian exports as
Rupee is the worst performing currency in Asia in the current fiscal, yet its
impact will vary from sector to sector.
However, the textile industry may be
at a disadvantage with sharp depreciation in Turkish Lira as Turkey is one of
the competitors. Same is true for commodities as Argentinian and Brazilian
currencies have depreciated at a steeper pace, added the FIEO chief.