Competitiveness and business environs hitting exports: Report
The Dollar Business Bureau More than 60% of exporters among 133 exporters from small, medium and large enterprises have reported a slowdown in their exports because of a dull business environment in the domestic and foreign markets. Not only the volumes, but also the momentum of exports has been lost, reported the exporters. They said that due to both internal external factors their exports have fallen and their order books have seen a decline by 20% for the coming times. In a survey conducted by the PHD Research Bureau of PHD Chamber of Commerce and Industry, exporters said that they are facing severe slowdown in order books because of weakening competitiveness in foreign markets and challenging business environment at domestic front. The strengthening of the rupee has also impacted Indian exports adversely in the recent past was the view of some respondents (around 25%). Further, the exporters said that because China is producing and exporting goods at cheaper prices, its goods are being preferred more in the world markets than Indian goods. It may be mentioned that demand may not be a major problem in the international market as growth of Chinese exports grew by 15 % during the January-February period and posted a surplus of US$ 121bn. While, India’s exports posted a negative growth of (-) 13% with a trade deficit of around (-) US$ 15bn during the same period, said the survey study. Despite the fact that there has been recovery in the US market, exports have not been catching at the earlier fast pace. High significance of exports to the European markets, which still has not recovered from recession, makes the situation unfavourable for Indian exporters. Even though there is a hope of recovery in the US market but weakening prosperity has been a major stumbling block to regain export momentum. Exporters reported complex tax structure as another bottleneck for the efficiency and promotion of exports. In order to overcome these problems Goods and Service Tax Act should be implemented at the earliest so as to overcome the problem of several taxes on exporters in India, said the exporters. The value of exports for the period April-February 2014-15 is recorded at US$287 billion. For the same period last year the cumulative value of exports stood at around US$ 284 billion, thus, a growth of 0.88% in dollar terms has been registered so far.
This article was published on March 30, 2015.