Surge in merchandise exports amidst global uncertainty an encouraging sign of revival: FIEO President
Reacting to the October 2024 merchandise exports of USD 39.2 billion, an impressive double-digit surge of 17.25%, the highest in recent times, the FIEO President, Mr Ashwani Kumar, emphasised that such a rate of growth amidst the continuing global economic uncertainty was an encouraging sign of revival. He added that the ongoing international trade disruptions, along with the volatility in crude and metal prices, also played a role in increasing the value of exports to some extent.
The tensions between Israel and Iran have resulted in logistical challenges to international trade, given that most exports to Europe, Africa, CIS and the Gulf region happen through the Red Sea route or the Gulf, prompting buyers to keep slightly large inventories, he pointed out.
The FIEO President highlighted that the incessant hard work put in by the exporting community has started showing results, which will likely continue in the coming months. However, the challenges pertaining to trade finance remain the key for MSMEs, which has been impacting the competitiveness of Indian products in the global markets.
Imports too increased in October, by about 3.9% to USD 66.34 billion, ballooning the trade deficit to USD 27.14 billion during the month, which needs to be looked into, he said.
Mr Kumar reiterated that the urgent and immediate need was to take steps on the liquidity front, with deeper interest subvention support and extension of Interest Equalisation Scheme for at least 5 years, thereby creating a predictable business environment for exporters. The imposition of an Rs 50 lakh per company cap in the Interest Equalisation Scheme hit many MSMEs, resulting in lost orders due to non-availability of further subvention. He called for the immediate restoration of the Interest Equalisation Scheme with a cap of Rs 10 crore for all MSMEs and 410 tariff lines for a period of 5 years. In addition, the government should extend RoDTEP benefits to all the sectors of exports as was available before Covid. Besides, key FTAs – with the UK, Peru, Oman and Sri Lanka - should be concluded soon, which FIEO has been urging the government for quite some time, he added.