Decline in August goods exports amidst global economic uncertainties coupled with drop in commodity prices and logistical challenges: FIEO President
Reacting to the August 2024 goods exports of USD 34.71 billion, a decline of over 9 per cent year-on-year, FIEO President, Mr Ashwani Kumar, said such a sharp decline in merchandise exports has come amidst continuous global economic uncertainties coupled with drop in commodity prices and logistical challenges. He 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 has taken a hit with sharp rise in international freight (both ship and air), he said. Mr Kumar also pointed out that had it not been for these trade disruptions, led by logistical challenges such as lack of shipping space, irregular shipping schedules, ships skipping Indian ports and declining commodity prices, merchandise exports would have recorded positive growth.
The continuous hard work put in by the exporting community is paying dividends though there is a slowdown in demand in several key markets, reflected in sluggish growth projections. Mr 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 the months to come, which will not only further boost the overall order bookings but also specifically the labour-intensive sectors of exports.
Imports, on the other hand, 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, according to the FIEO President.
However, notable 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, he said.
Call for urgent steps
He emphasised 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 exporters. The government should extend the RoDTEP Scheme, expiring on September 30, 2024 so as to enable exporters to plan ahead. Besides, data transmission challenges with regard to DGFT, ICEGATE and EDPMS should also be addressed on top priority and preferably a single agency should be given the task for updation and maintenance of all the 3 systems for uniformity and a 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 has been urging the government for quite some time now, Mr Kumar added.
Source: Exim News Service: New Delhi, Sept. 18