Port Wings News Network:
Reacting to a nominal growth in February, 2020 exports by 2.91 percent at USD 27.65 billion during the month, Mr Sharad Kumar Saraf, President, Federation of Indian Exports Organisations (FIEO), said that in the wake of Novel Corona Virus (COVID19), which not only pulled down the global sentiments but also affected the supply chain both internationally and domestically, such modest growth is encouraging. However, the impact of pandemic will be more visible in exports figure of March onwards.
FIEO Chief said that with major global players including China, US, economies of Europe, Japan, South Korea, Australia, Russia, Gulf countries are also facing the brunt as oil and commodity prices have also shown drastic decline in recent days.
Sixteen out of the 30 major product groups were in positive territory during February 2020 including petroleum, engineering goods, organic & inorganic chemicals, drugs & pharmaceuticals, electronic goods, ceramic products & glassware, iron ore, man-made yarn/fabs/made-ups, handicrafts and handmade carpet, carpet, marine products, oilseeds and few agri products have shown some positive or nominal growth. However, all other major sectors of exports including almost all labour-intensive sector of exports are still in negative territory.
Further, imports of USD 37.50 billion with a marginal increase of 2.48 percent during the month has also been subdued. With crude prices moving southwards and supply disruptions extending to Europe and the US, due to COVID19, more comfort is expected in imports during the next few months.
Mr Saraf said that domestic issues including uncertainty over MEIS Scheme has been a major cause of concern as exporters’ are indecisive to firm up new contracts in the absence of clarity over MEIS beyond March 2020. The problem of risky exporters has further compounded the liquidity problem as their GST and Drawback claims have also been held up.
President FIEO reiterated that the stalemate over MEIS for apparels and made ups should be resolved immediately. Further with RoDTEP announcement made today will go a long way in enhancing the growth prospects not only in the short-term but will also give it a much-needed boost in the medium and long-term. However, the same should be notified with immediate effect for all the products with lead time of at least 3 months now so that exporters may factor the same in finalising new orders and making their transition to the new scheme smooth while continuing with MEIS in the interim period.
Going with the current trend, FIEO Chief is of the view that the total merchandise exports for FY 2019-20 will remain in the range of USD 320-325 billion ending the fiscal with a trade deficit of around USD 155-160 billion reducing the CAD further.