New Year, New Hopes
As we enter the new year (and decade), stakeholders in India’s trade ecosystem are cautiously optimistic about what the future may bring for Indian exports and exporters. The Federation of Indian Export Organizations (FIEO) has said it expects merchandise exports to be in the $330-340 billion range for FY2020, a respectable figure given that exports were $331 billion in FY2019, and it’s been a tough year for international trade. Even so, this optimism is also tempered with caution, and a recognition that the global economy is evolving and exporters will have to evolve alongside.
Thankfully, the government has recognized that it needs to do more to support India’s exporters, especially SMEs, and has announced an outreach initiative to help restructure stressed assets in the ecosystem. However, a certain section of these businesses, chiefly medium-sized ones, are asking for a reevaluation of the policies and oversight they are subject to, asking to be moved under the auspices of the Commerce & Industries Ministry instead of the MSME Ministry. Whether such a move will be considered by Finance Minister Nirmala Sitharaman in the 2020 Budget remains to be seen.
In either case, after the turmoil of the trade wars and international protectionism in 2019, Indian exports are approaching 2020 with cautious optimism. A new year often signifies new beginnings, and with a fresh Union Budget, fresh Foreign Trade Policy, and a reinvigorated government, 2020 is bringing new hope to India’s export ecosystem indeed.
FY20 merchandise exports likely at $330-340 billion: FIEO
India’s merchandise exports could clock $330-340 billion in 2019-20, the Federation of Indian Export Organisations (FIEO) has said. “We feel our goods exports may touch $330-340 billion in the current fiscal…If the global situation improves, which is likely in the first half of 2020, we may look for 15% growth in exports during the next financial year,” said FIEO President Sharad Kumar Saraf in a statement on 30th December. India’s exports in 2018-19 were $331 billion.
Indian exports have to be aligned with changing patterns of global economy: FIEO
Indian exports have to be aligned with changing patterns of the global economy, said the Federation of Indian Export Organization (FIEO). FIEO President Sharad Kumar Saraf said that 50% of the global imports today are accounted for by electrical & electronics products, automobiles, machinery, petroleum products, and plastics products. “Unfortunately, the share of such products in our exports is less than 33% despite having petroleum products accounting for roughly half of it. Our global share in such products is much less than 1%,” he added.
Govt launches MSME ‘Outreach Initiative' for restructuring stressed assests
Union Finance Minister Nirmala Sitharaman on 28th December said that the government has launched Micro Small and Medium Enterprises (MSME) ‘Outreach Initiative’ for the restructuring of stressed standard assets. “In order to address the working capital needs of MSMEs on account of stress arising from delayed payments, PSBs are offering up to 25% enhancement in working capital limits for standard MSME accounts as a Standby Line of Credit and have launched an MSME Outreach Initiative for restructuring of stressed standard assets as needed on priority and in a timely manner, besides providing new term loans, payment solutions for delayed receivables, bill discounting and trade finance,” said the Finance Ministry in a statement.
Budget 2020: Medium enterprises want Nirmala Sitharaman to move them out of MSME Ministry; claim bias
The minuscule number of medium enterprises in the MSME sector has sought to be moved out of the administrative control of the Ministry of MSME in the 2020 budget as they are ‘persona non grata’ in the government, according to industry body FISME. “Keeping in view that medium enterprises have specific needs and they do require policy attention, it would be better that their administrative control is shifted from Ministry of MSMEs to Ministry of Commerce and Industries,” FISME said in its budget expectations to Finance Minister Nirmala Sitharaman.
That’s All, Folks…
Slumbering elephant, caged tiger, sleeping dragon, tortoise -- metaphors describing the Indian economy combine promise and frustration. “India’s is very much the tortoise story in the fable -- a story starter coming good over a time,” T.N. Ninan wrote in The Turn of the Tortoise (2015). The potential was never in question. The tortoise needed time. The droopy tiger needed unshackling. Observers had hung on to the faith that India will resolve the roadblocks and speed-breakers: an underperforming state, cloying cronyism, chronic graft, populist politics, retreating forest cover and the toxic air and water.