Overall, June exports (both goods and services) along with Q1, 2023-24 exports have seen decline on the back of slowdown in growth coupled with demand contraction across the globe, said Dr A Sakthivel, President, FIEO. Major economies including US and China have shown downward trend in exports, along with the Eurozone slipping into recession during the start of the year itself, marking contraction in their GDP or a slow start to their economy in most of the economies of Europe including UK, added Dr Sakthivel. The slowdown comes in wake of higher energy prices contributing to curbing demand in Europe’s largest economy and surging inflation, said Dr Sakthivel. One of the reasons for moderating pace of growth in merchandise exports significantly in 2023 has been because of persistent geopolitical tensions, disruption in global supply chain due to Russia-Ukraine war, 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 are of the view that exports will start showing better growth numbers shortly, 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 June 2023, include electronic goods, drugs & pharmaceuticals, iron ore, fruits & vegetables, oil seeds, cashew, tobacco, handicrafts excluding handmade carpets 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.