Fall in exports in high-performance sectors such as gems and jewellery and engineering products slowed down the overall goods exports by 0.64 per cent (year-on-year) to $26.07 billion in April.
But imports posted a 4.48 per cent growth to $41.4 billion in the month resulting in widening of trade deficit to $15.33 billion, according to estimates released by the Commerce & Industry Ministry on Wednesday.
India’s export performance in April is in stark contrast to exports growing at 11 per cent in March to $32.55 billion, which was the highest monthly performance.
Exporters expressed their disappointment with the fall in shipments in labour-intensive sectors including leather & leather products, gems & jewellery, engineering goods, cotton yarns, fabric & made-ups, carpets and marine products and pointed out that escalating global tension was making the situation worse.
“These sectors are still facing the problem of liquidity, besides other challenges including global trade war, protectionism, fragile global conditions and constraints on the domestic front,” according to FIEO President Ganesh Kumar Gupta.
Gupta said there may have been front loading of exports in the past as exporters were apprehensive of the withdrawal of the Generalised System of Preferences scheme by the US, which allows access to a number of Indian goods at zero duty into the American market, and the developments in Iran.
A drop in exports of engineering goods in April, which was at the top in March, has exporters from the sector worried. “Virtually no growth in merchandise exports and a sharp drop of over seven per cent in highly employment-oriented engineering exports is a matter of concern for Indian exporters, who are facing global headwinds like escalated trade war, geo-political uncertainties in the Middle East and rising cost of finance and raw material at home,” said EEPC Chairman Ravi Sehgal.
He said the RBI needs to cut interest rates in its June credit policy review to make cheaper finance available for exporters and the government needs to take measures such as making available steel at reasonable prices.
Major product groups
Of the 30 major product groups, only 14 posted a growth during April. These include petroleum, organic & inorganic chemicals, drugs & pharmaceuticals, ready made garments, electronic goods, ceramic products & glassware, handicrafts, commodities besides some plantation, agricultural and dairy products.
Oil imports were estimated at $11.38 billion, which was 9.26 per cent higher in dollar terms. Import of gold at $3.972 million in April was 55 per cent higher.
Exports of goods in 2018-19 registered a 9.06 per cent growth to hit a new high of $331 billion, breaching the previous high of $314 billion clocked in 2013-14.
Source :- Thehindubusinessline.com