Negative growth in exports show worsening global economic conditions and pointing to further downward revision of global trade growth: Sharad Kumar Saraf, President, FIEO

Reacting to the sliding merchandise exports growth of -6.05 percent of USD 26.13 billion during August, 2019, FIEO President, Mr Sharad Kumar Saraf said that such a contraction in exports is a reflection of uncertainties, sluggish global demand and rising tariff war. The softening of crude, steel and other commodities prices also pulled down exports. FIEO Chief is of the view that US-China Trade war, Brexit and developments in Iran further aggravated the problem of the world economy. The uncertainty attached has also affected the flow of investment and added to currency volatility.

Only 8 out of 30 major product groups were in positive territory during August 2019 including electronic goods, iron-ore, ceramic products & glassware, mica, coal & other ores, minerals including processed minerals, marine products, cashew, species and tea. Rest all major sector of exports including almost all labour-intensive sector of exports besides petroleum were in the negative showing such a decelerating trend. The slowdown in chemical and plastics exports are particularly worrisome as we were growing in these sectors.

However imports of USD 39.58 billion during the month has come as a respite for the economy showing a decline of -13.45 percent. Such a de-growth in imports has come after August 2016-17. However, profile of imports would suggest whether it has any bearing with domestic slowdown.

Mr Saraf said that domestic issues including access to credit, cost of credit especially for merchant exporters, interest equalization support to all agri exports, benefits on sales to foreign tourists and quick refund of GST specially ITC refund should be seriously looked into. Further WTO complaint schemes addressing cost disabilities of our economy should be immediately deliberated and drafted so as to replace some export promotion instruments to give a much needed boost to the exports sector.