Responding to the monthly Trade Data for August 2022, FIEO President, Dr. A Sakthivel said that exports of $33.92 bn with a marginal increase of 1.62 percent, has been mainly because of the headwinds in global trade and the fact that inventories are very high across the world. Supply side disruptions due to Russia-Ukraine and China-Taiwan crisis and inflation plaguing almost all the economies as the purchasing power has also dwindled, affecting the off-take and thus the demand is also showing signs of slowdown. However, the demand for low-value products is increasing, helping our MSMEs, added Dr. A Sakthivel. FIEO President is also of the view that as buyers are moving from China, both as China is becoming costlier and less reliable with a zero Covid tolerance policy and as anti-China sentiments are gaining ground day-by-day, which itself is a very positive development in the medium to long-term.
The Indian economy piping the UK to become the fifth largest economy has also come as a booster and will further add to the enthusiasm of the trade and industry allowing them to perform in such challenging situations.
FIEO Chief reiterated that the slowdown in major economies across the world including China will further affect the overall forecast for the global growth process. The export figures have also been affected as the prices of most of the metal and commodities are falling, which has resulted in value-wise export realization. However, merchandise exports during April-August 2022-23 were $193.51 bn with an increase of 17.68 percent over $164.44 bn in April-August 2021-22 continue to showcase the strength of the exports sector amidst challenging ongoing geo-political and rising global uncertainties.
FIEO President said that the top sectors, which led the exports growth during the first 5-months of the fiscal were Petroleum Products, Engineering Goods, Organic & Inorganic Chemicals, Drugs and Pharmaceuticals, Electronic Goods, RMG of all Textiles, Gems & Jewellery and Rice. Labour-intensive sectors also contributed to the exports basket, which is a good sign, further helping job creation in the country.
Dr A Sakthivel further reiterated that the benefits of the newly signed FTAs and the PLI Scheme will further help us in building as we continue to move ahead during the fiscal.
Imports growth of about 37.28 percent during the month is of concern and has been mainly on account of Petroleum Products; Coal, Coke and Briquettes; Electronic Goods; Machinery, electrical & non-electrical; Organic and Inorganic Chemicals and Pearls, precious & Semi-precious stones; Artificial resins, plastic materials, etc.; Vegetable Oil and Iron & Steel besides other items may be looked into. Crude prices have also added to the import bill of Petroleum Products, thereby to the import basket of the country added Dr Sakthivel. He assured that the industry is working to reduce imports by augmenting production.
FIEO President is of the view that the government has announced a slew of measures to support exports, however, there is a need to support exports through enhancing credit limit under ECLGS by 25 percent, extending repayment period under ECLGS by one year, expanding subvention under Interest Equalisation Scheme, augmenting container manufacturing, developing an Indian Shipping Line of global repute, increasing the validity of RoSCTL and RoDTEP scrips to 24 months and link transferability with realisation, extend RoDTEP to EOUs, SEZ and Advance Authorisation, expand usages of RoDTEP and RoSCTL scrips and logistics support for the sector looking at the higher freight cost.