Merchandise exports grew 3.93 percent year-on-year to $29.99 billion in May. Imports were 7.76 percent higher at $45.35 billion during the month. While this moderate exports growth is a reflection of extremely modest growth in global trade, what is more concerning is the swelling crude import bill and increasing gold imports. Also, though some important sectors performed well during the month, but all is not well with our exports as the latest official figures show.

A look at the detailed data shows that some key sectors such as engineering goods, iron ore and leather products did well in May, but overall 13 out of 30 major product groups, including gems and jewellery, were in negative territory. Also, exports growth, though helped by some hand-holding by the government, is still at a sub-optimal level and MSME sectors are still facing a lot of problems such as liquidity crunch and volatility in currencies.

Meanwhile, according to a news report, the government has drawn up a strategy to benefit from the ongoing tariff war between the US and China. The report adds that the Commerce Ministry has identified 203 products where exports could be increased to the US, replacing Chinese goods, and 151 items where exports to China could rise. This is a timely step. There is no doubt that protectionism is a bane for world trade, and to mitigate its effect on our exports, we need to find a smart way out.

But constraints are there on the domestic front as well and they need to be addressed urgently. An exporters' association has recently raised concern about a number of issues such as inadequate access and high cost of credit, lack of marketing support, poor export related infrastructure, etc. There are many other issues. The Budget is ahead, and it offers an opportunity to the Centre to bring in some comprehensive measures to help the sector.