August goods exports decline by over 9 percent year-on-year to USD 34.71 billion amidst global economic uncertainties coupled with drop in commodity prices and logistical challenges: FIEO President
Reacting to the August goods exports of USD 34.71 billion, which saw a decline of over 9 percent, FIEO President, Mr Ashwani Kumar said that such a sharp decline in merchandise exports has come amidst continuous global economic uncertainties coupled with drop in commodity prices and logistical challenges. Mr Ashwani Kumar added that the ongoing international trade disruptions along with drop in crude and metal prices have also played a key role in bringing down the value of exports. Some of the exporters have diverted to the domestic market as profitability in exports have taken a hit with sharp rise in international freight (both ship and air), reiterated FIEO President. Mr Kumar also said that had it not been for these trade disruptions led by logistical challenges such as lack of shipping space, irregular shipping schedule, ships skipping Indian ports and declining commodity prices, the merchandise exports would have recorded positive growth in exports.
President Chief also added that the continuous hard work put in by the exporting community is paying dividends though there is also slowdown in demand from several key markets, reflected in sluggish growth projections. Mr Ashwani Kumar, however, reiterated that he is optimistic of better growth numbers with improved demand coming in from the European Union, UK, West Asia and the US in months to come, which will not only further give a boost to the overall order bookings but also to the labour-intensive sectors of exports.
The FIEO Chief added that imports increased by about 3.3 per cent to USD 64.36 billion in August 2024. In absolute terms, the trade gap widened to USD 29.65 billion in August, compared to USD 23.5 billion in July, which is a point of concern, added President, FIEO.
However, good growth in exports of coffee, tobacco, spices, meat, apparel, chemicals, engineering, carpets, handicraft, plastic etc is an encouraging sign for job growth in the country.
FIEO President, Mr Ashwani Kumar further reiterated that the urgent and immediate need of the hour is to take steps on the liquidity front with deeper interest subvention support and extension of interest equalisation scheme for at least 5 years, creating a predictable business environment for the exporters. Government should extend the RoDTEP Scheme, expiring on 30th September 2024 so as to enable exporters to plan ahead. Besides, data transmission challenges with regard to DGFT, ICEGATE and EDPMS may also be addressed on top priority and preferably a single agency may be given the task for up-dation and maintenance of all the 3 systems for uniformity and holistic approach.
The government should also look at facilitating trade through easy & low cost of credit, marketing support and conclusion of some of the key FTAs with UK, Peru and Oman soon, which FIEO have been urging to the government for quite some time now, added Mr Kumar.
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