FIEO Says Overall Exports Sector on Road to Recovery, however Demand Still an Issue in many Markets Due to High Inventory

[FIEO Press Release/15.11.2023]

Overall exports during the month of October 2023 have turned positive with a growth of 9.43 percent to USD 62.26 billion, which is a good sign and shows the strength of India’s manufacturing and services capabilities during these challenging times, said FIEO President, Dr A Sakthivel while reacting to the October export figures. This suggests that the exports sector is on the road to recovery due to the resilience shown by it. Demand is still an issue in many markets due to high inventory and growth reflects that we may be eating into the share of some other countries. Dr Sakthivel, however, feels that growth of 6.21 percent in merchandise exports is a good sign as this has happened despite weak demand and moderation in commodity prices, which spiked last year after the Ukraine war. FIEO Chief further added that the tension in West Asia had also made businesses and markets sceptical and nervous. He is of the view that the conflict will have a limited impact unless it escalates, and more countries join in. While goods exports growth has remained somewhat sombre, services have continued on with its momentum and maintained a rising trend, helping to narrow the overall trade deficit and keeping the current account deficit under check.

22 out of 30 key products sectors, which have shown positive growth during the month of October 2023, include Engineering Goods, Drugs & Pharmaceuticals, Electronic Goods, Iron Ore, Ceramic Products & Glassware, Processed Items, Marine Products, Meat, Dairy & Poultry Products, Cotton Yarn/Fabs./made-ups, Handloom Products etc, Man-made Yarn/Fabs./made-ups etc., Carpet, Handicrafts excl. handmade carpet, Plastic & Linoleum and Jute Mfg. including Floor Covering.

FIEO President also said that the increase in imports is a cause of concern, which should be looked into through analytical profiling of the same. However, an increase in gold imports by 90% and over US$ 7 Bn in value may push jewellery exports in next few months.

FIEO President further reiterated that the need of the hour is to provide further support to the MSMEs through easy and low cost of credit and marketing support. Long pending demand of interest equalisation support to all sectors of export and further extension of ECLGS till March 31, 2024, will help in giving much needed cushion to the sector. The trade and industry would also like to see important FTAs with UK and EU to see the light of the day soon, to further provide much needed boost to the sector, said Dr A Sakthivel.