Huge push required to meet FY2014-15 export target: FIEO
The Dollar Business Bureau The Federation of Indian Export Organisations (FIEO) has said that the decline in India’s exports reflect the contraction in demand in major and emerging markets, and the plunge in prices of crude oil, commodities and metals in the international market. According to the Ministry of Commerce, while India’s cumulative exports in April-December FY2014-15 stood at around $241.1 billion, which is up around 4% y/y, monthly exports continue to be low, reaching around $25.4 billion in December 2014, which is down about 3.77% y/y. The decline in exports partly offset reduction in imports which declined about 4.78% y/y to around $34.8 billion in December 2014. However, cumulative imports of around $351.2 billion during April – December 2014 are up around 3.6% y/y leading to a trade deficit of around $110 billion during the period which is up around 2.8% from the deficit of $107 billion recorded during April – December 2013-14. Oil imports have declined sharply in December 2014 due to the plunge in crude prices. According to the Ministry of Commerce, India’s oil imports in December were valued at almost $10 billion, which is down 28.6% y/y. However, non-oil imports in the month increased almost 10% y/y to about $24.9 billion, mainly due to higher imports of cotton, ores, pulses, vegetable oils, fertilisers, iron and steel, and electronic goods. With India’s exports in April – December 2014 standing at around $241 billion, it remains a challenge to meet the $340 billion in the remaining four months of FY2014-15, and may adversely impact the domestic economy in the coming months. Rafeeque Ahmed, President, FIEO, said that it is worrying that many of the sectors which exhibited double digit growth in the past like leather and apparels have also slowed down in December 2014. “More surprising has been the decline in export of rice, spices, gems & jewellery, cotton yarn, fabrics, made-ups and handicraft. These are all labour intensive sectors and their slowdown will have a bearing on employment scenario as well,” he said in a statement. The FIEO Chief added that in order to meet the export target of $340 billion for this year, India will have to export an average of $33 billion per month, which is about 26% higher than the average exports of around $26-27 billion per month seen in the past. The FIEO chief has urged the government to help boost exports. He said that the depreciation of the Indian Rupee against the USD and marginal inflation have made Indian exports competitive, and this can be improved by providing Interest Subvention, Reduction in Transaction Cost and continuance of Exim Schemes.
This article was published on January 16, 2015.