Govt mulling proposals for urgent measures to perk up exports

New Delhi : With shipment shrinking in April for the fifth consecutive month, a worried Commerce Ministry has begun an analysis of the merchandise exports and is evaluating proposals for urgent interim support to perk up growth and prevent job losses.

The study will initially cover five sectors that had a significant share in the country’s export basket last fiscal — engineering (accounting for 23% of total exports), pharma (5% including bulk drugs, drug intermediates, drug formulations and biologicals), petroleum (18.33%), farm products (12.6% including agriculture and allied products, plantation, marine and cotton), gems and jewellery (13.3%), the Ministry sources told.

To improve data base of the merchandise exports, the Ministry will hold a meeting shortly with Directorate General of Commercial Intelligence and Statistics (DGCIS), Customs department, NSDL Database Management (which helps in collection of data from special economic zones) and the think tank ICRIER (helping DGCIS with online surveys to collect services exports data). Issues that will be discussed include linking all ports to the electronic data interchange system for faster and better capturing of data. Close to half of the around 220 ports in the country are yet to be EDI-linked, leading to delays in data collection and assessment.

Interim measures being suggested for certain affected sectors include raising the duty credit scrip benefits under the Merchandise Exports from India Scheme and increasing the duty drawback rates. Also being considered are reintroduction of the 3% interest subvention scheme (for all sectors) and enhancement of the scope of the Market Access Initiative scheme (for marketing projects, capacity building, support for statutory compliance, studies and project development).

Citing a decline in order booking position in April, exporters had warned that if the trend continues for the next six months, there could be shedding of workforce.

Another sector the Ministry is keen on giving a push is project goods which currently are performing far below potential. Exports from the sector last fiscal were just $41 million (that too, an 11% contraction). The Ministry has asked agencies such as DGCIS to devise a better method of data collection on project exports.

The Government is keen on boosting project exports (through better credit access to interested companies via special lines of credit and Buyers’ Credit Scheme) especially in markets in Africa, Asia, Latin America, Caribbean region and non-EU countries in Europe with major infrastructure needs.

After the shock of exports in March hitting a 67-month low with a negative growth of 21%, exporters woes continued with growth in shipment in April shrinking 14% owing to a weaker demand overseas, rupee registering a lower depreciation against the dollar via-a-vis major currencies such as Euro, Pound Sterling and Yen, besides softening of metal, commodity and crude prices. Items such as petroleum products, gems and jewellery, rice, marine products, meat, dairy and poultry products, leather and leather products, electronics, man-made yarn and plastic goods contracted in April.

Source : dailyshippingtimes.com