India’s exports decline further; exporters say it is a ‘wake-up’ call for government

The total merchandise exports in the first two months of the current fiscal was worth $44.4 billion, down 17.21% from $53.6 billion, registered during the same period last year.

Himanshu Vatsa | The Dollar Business Exports India’s exports reduced to $22.3 billion in May this year, registering a steep fall of 20.19% from the same month a year ago. According to the Commerce Ministry data released today, the total merchandise exports in the first two months of the current fiscal was worth $44.4 billion, down 17.21% from $53.6 billion registered during the same period last year. The country’s exports have been witnessing negative growth since past six months. In March 2014, the exports saw 21% fall, steepest in the last six years. Falling exports has become a major concern for Indian exporters and policy makers. Experts say that downward prices of crude oil and major commodities in the international market are the main factors behind the negative growth of India’s exports. “The continuous negative double growth in exports since December, 2014 is a matter of serious and grave concern as the decline has further exasperated to over the 20% in May 2015. This, if allowed to continue will severely impact the Indian economy,” said S C Ralhan, President of The Federation of Indian Export Organisations (FIEO). The latest data shows the deepest (86%) fall in the export of iron ore, followed by petroleum products shipment which declined 59%. Besides, overseas shipment of electronic goods, leather, gems and jewellery items also witnessed double digit fall in May. Ralhan said that Indian exporters are also losing out on competitiveness due to high logistics cost and ground level transaction costs. Demanding quick action from the government, Ralhan said that the government must ensure timely release of exports benefits. “Also, need of the hour is the immediate introduction of export development fund for aggressive marketing. Delhi Exporters Association said the government should take the downward trend as a “wake-up call”. “We are no longer competitive in the international market because of unclear policies of the government. This situation will persist if the government does not take it as a wake-up call,” Tilak Raj Manaktala, President of Delhi Exporters Association, told The Dollar Business. Alleging the government of being indifferent towards exporters, Manaktala said “The transaction cost has been escalating without any improvement in the infrastructure. The government is yet to implement interest subvention scheme for exporters. Instead of reducing our burden, it has increased freight charges.” The government data said that imports during May also reduced to $32.75 billion, down 16.52% from the corresponding month figure of $39.23 billion in previous year. This has helped in lowering the country’s trade deficit to $10.4 billion during April-May this year as against $11.23 billion recorded in the same period last year. Reduction in oil imports also contributed in narrowing the trade gap. The country’s total oil import in May, 2015 was worth $8.53 billion, 40.97% lower than the corresponding month’s figure last year. The value of April-May oil import this year was $15.98 billion, which was 41.76% lower than $27.4 billion—the import value of the first two months of the previous fiscal.