Sops in the offing to boost falling exports

Tags: News
The government will offer incentives to boost sagging exports. Merchandise exports have dropped for the seventh month in a row.

Commerce secretary S R Rao said on Tuesday the government would come out with a new booster package. “We are awaiting a final confirmation from the finance ministry and hope to announce something towards the end of this week,” he said.

Merchandise exports last grew in April, by 3.2 per cent, but have been on a slide ever since. May saw a drop of 4.16 per cent, June 5.45 per cent, July 14.8 per cent, August 9.7 per cent, September 10.8 per cent and October 1.63 per cent.

Rao refused to name the incentives that could come, but it is expected that the two per cent interest subvention will be extended to a few more sectors like engineering. Besides, the additional scrip benefits may be extended to the handful of exporters who have done well even in the current grim scenario.

Trade data released by the commerce ministry indicate goods exports declined by 4.17 per cent in November to $22.2 billion from $23.2 billion last year.

Imports surged in November by 6.35 per cent to $41.5 billion ($39.1 billion). This resulted in a trade deficit of $19.2 billion ($15.8 billion).

In April-November exports contracted by 5.95 per cent to $189.2 billion from $201.1 billion in the corresponding period last year. Cumulative imports contracted by 1.58 per cent to $318.7 ($323.8 billion). Thus, the cumulative trade deficit was $129.5 billion ($122.6 billion).

The ministry hopes the new or extended incentives would arrest the exports decline. Despite the contraction in exports in the last seven months, the ministry continues to stick to the export target of $360 billion this year.

It says there will be a turnaround in the next quarter.

The ministry has estimated a growth of 20 per cent over last year’s exports of $303 billion.

A Sakthivel, chairman of the Apparel Export Promotion Council, said there was no change in the situation in Europe and the US. “The government should ease the procedure to import fabrics. It will help raise textile exports,” he said.

M Rafeeque Ahmed, president of the Federation of Indian Exports Organisation (Fieo), said these latest data reflected the contraction in global demand.

“With the slowdown in global trade, pricing has become a key issue and extension of some fiscal benefit will help exporters to adjust prices,” Ahmed said. He added that exporters were either booking orders at a wafer thin margin or at a loss.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • Government must give up majority ownership in loss making PSU banks

    After four years of braving economic slowdown and provisioning for rising non performing assets (NPAs), public sector banks are in urgent of capital.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

BK Chaturvedi

Cooperative federalism and governance

Improving relations between the states and the Centre to improve ...

Kuruvilla Pandikattu SJ

Reason drives religion, science

Both religion and science are driven by reason, claims Rama ...

Gautam Gupta

Retailers have it tough, thanks to e-commerce

For the past few months our focus has been on ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture