As
we know India's exports decreased in this year again, with cotton yarn,
apparel, and engineering suffering the most. In September, merchandise exports
decreased 3.5% year over year due to weakening global demand, rising inflation,
geopolitical unrest, and export limitations on some products. Exports had previously declined in February
2021. The trade imbalance increased from $22.47 billion in the same month last
year to $26.72 billion last month, according to data issued by the commerce
ministry on Monday. The trade imbalance did, however, gradually close. In this
blog, we will discuss how global trade is facing toughening conditions as a
slowdown in exports.
New
Delhi: By observing the trade data for the month of September, 2022, Dr
Sakthivel, president FIEO stated that the decreasing in exports is a reflection
of toughening conditions of the global trade facing demand on account of high
inventories, increasing inflation, economic entering recession, high volatility
in currencies and geopolitical concerns. The decline in the commodity prices
and restriction on some exports will stem the price to gain the domestic
market, have affected the growth numbers.
Also,
he expressed that the decline in exports of engineering goods, apparels and
textiles sectors is of particular concern as these are the major sectors to
huge employment. At the current time, the increase in exports of electronic
goods on a sustained basis is a fair sign besides growth in exports of gems
& jewellery and petroleum products.
Further,
Dr Sakthivel also added that in the current situation, the main focus should be
on rendering liquidity at competitive price to the export sector and therefore
RBI may consider commencing export credit refinance facility to financial
institutions so as to encourage them to lend to the export sector with
refinancing from RBI to the repo rate.
Since
the interest rates have changed upward and are now more than pre-covid level,
there is a strong case to restore the interest equalization support to 5 % and
3% respectively.
Also,
the central government should take into the request of the export sector for
continuing with IGST exemption on freight on exports, which lapsed on 30th
September, 2022.
Indian
exports saw unexpected growth in September, despite fears of a worsening
outlook for international trade, according to new statistics from the Indian
government.
According
to Export Import data released by
India’s commerce department at the end of last week, Indian exports grew 4.8%
year-on-year in September.
"Since
the signing of the India-UAE Comprehensive Economic Partnership Agreement,
overall exports to the UAE have been increasing, and in July, exports of plain
gold jewellery to Middle Eastern markets rose by 29%. We eagerly anticipate the
free trade deal with the UK, and the India-Australia Economic Cooperation and
Trade Agreement would also be beneficial to business. Due to seasonal demand
and the approaching Christmas season, we anticipate growth in the future
months, particularly from Western countries, Shah said.
The
biggest slowdown in August was seen in engineering exports, which account for
one-fourth of the value of all items exported from India; they fell 14.59% to
$8.25 billion. Compared to $33.38 billion in August of previous year, outbound
exports fell to a 13-month low of $33 billion in August. Exports decreased 9%
sequentially from $36.27 billion in July to $192 billion overall between April
and August, while they increased 17.1% year over year.
"Sri
Lanka is experiencing an economic crisis, while Bangladesh is dealing with a
gasoline shortage and Pakistan is dealing with significant flooding. India's
own raw materials are still unaltered. According to Chairman of the Apparel
Export Promotion Council (AEPC), Narendra Goenka, we will make up for the loss
by the end of the year.
In
August, India exported garments worth $1.32 billion, a 0.42 percent decrease
year over year. Across the board (from April to August), outbound exports
increased by almost 18%. In August compared to the same month last year, raw
material exports, such as cotton yarns and fabrics, fell by over a third to
$881.86 million.
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