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Despite export growth, exporters face uncertain times
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Bikky Khosla | 12 Jul, 2011
Despite robust growth of a whopping 46.6 percent in the country's exports in the month of June, a recent survey has indicated that this strong growth performance is not likely to be sustained in the months to come. Notably, the country's exports rose 46.4 percent in June at $29.2 billion compared to June 2010, taking the growth of the sector to $79 billion in the first quarter of the current fiscal.
However industry body, FICCI, is apprehensive of this growth. The survey conducted by the body concluded that the party is not going to last long. Considering the current high inflation and increased interest rates, I feel exporters are actually feeling the heat of the tight monetary situation which will be reflected in a couple of months from now.
With the end of interest subsidy scheme for exporters, and the likely end of the DEPB scheme in September, this will adversely affect the performance of the export sector. Add to it the rising cost of raw material and fuel.
While rise in input costs have put pressure on exporters to maintain their competitiveness in the global markets, rise in fuel prices have led to increase in transportation costs within the country and in international ocean freight rates. All these added together, I actually would not be rejoicing at the recent figures of the past months.
At one point of time, exporters will have to pass on the burden of increased production cost to the consumer. As such, this could lead to a drastic fall in orders from overseas markets.
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Re problem in Export
Simon Ayodele Ipaye | Wed Jul 13 13:58:04 2011
Dear Sir
Thanks for your mail, and I wish to contribute to this issue, This trend will last for more years why? The world is becoming dangerous,As many exporter always ask for TT and many were duped through this means, now many people who want to import are afraid, last year I lost USD35,000 which I borrow from the Bank to one man in Indonesia while I am looking for A4 Copy paper. now any company that can not work with me on DP (Deferred Payment) Let them go away with their goods ,for this reason the problem will continue
thanks
Best rgds
S.A.Ipaye
Exporters Face Uncertain Times
Sunil Kumar | Wed Jul 13 03:40:13 2011
Agreed.But all these are inevitable and is going to happen in the long run to having a stablised economy. There are ways of coming out of the situation as the planning at all levels needs to be improved with reliability and consistency in the upstream and the down stream.
The quality of working hands and thought procedures have taken a beating in the industry sector on the whole, over the past years.
In India with the arrival of the multinationals from various parts of the world, there is a constraint of execution vis-a-vis the standards available.
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