Responding to the May exports figures, Dr A Sakthivel, President, FIEO said that the sharp decline in the international demand situation has led to the fall in overall exports. With major economies including US and China showing downward trend in exports, along with the Eurozone entering into technical recession after the region shrank by 0.1% in Q1 2023, marking two consecutive quarters of contracting GDP. The slowdown comes in wake of higher energy prices contributing to curbing demand in Europe’s largest economy and surging inflation, added Dr Sakthivel. One of the reasons for moderating pace of growth in merchandise exports significantly in 2023 has been because of persistent geopolitical tensions, monetary tightening and recessionary fears which has continuously led to a fall in consumer spendings across the globe especially in advanced economies, reiterated FIEO President.
FIEO Chief added that we hope that exports will start showing better growth numbers starting July, 2023, as things are expected to improve from Q3 of the Calendar year, with fresh orders or order bookings for festival and New Year season beginning to come. Some of the key sectors which have shown positive growth during the month of May 2023, include electronic goods, ceramic products & glassware, drugs & pharmaceuticals, iron ore, fruits & vegetables, oil meals, oil seeds, cashew, spices, tobacco, other cereals, rice, tea and coffee. FIEO Chief said that though the decline in imports is a good sign for the country, however, that has also led to de-growth in our key export sectors like petroleum products, gems & jewellery, organic & inorganic chemicals etc.
FIEO President further reiterated that the need of the hour is to provide further momentum to the economy through easy and low cost of credit to the MSMEs, a very-long pending demand of the exporting community of marketing support for further promoting Brand India products and services globally and GST exemption on Freight on exports. Besides, the interest equalisation support across all sectors of export and 3-6 months transition period may be provided, whenever a major change is notified in the Foreign Trade policy, which will provide much needed cushion during such tough and challenging times.
