The Recuperation Highway
The recently released July trade data indicates that Indian exports are on a recovery path, but there is still a long way to go. India’s July trade data states that the exports for the month are down by 10.3% as compared to the same period last year. June trade data indicated that exports from India were down by only 12.4% when compared to June 2019.
With most countries now easing their lockdowns, essential goods continue to be in demand. July's recovery was mostly led by exports of rice, spices, cereals, and fruits & vegetables, along with pharmaceuticals, while higher-value processed products continued to suffer. Given the current circumstances under the pandemic, the decline in high-value purchases and discretionary purchases globally is as expected. However, it is interesting to note that ex-petroleum and gems exports in July have ticked up by a few percentage points, although they are still down 20%for the full quarter.
On the other side, due to the depreciation in the Indian Rupee over the year, the rupee-value decline in exports during the April-July quarter stands at only 2.14%, while the dollar-decline in exports comes at 10.21%. While this represents a decline whichever way you look at it, the weaker rupee will lessen the burden for exporters, as exports become more competitive from a price standpoint in the international market.
Exports contract 10.21 pc in July; trade deficit narrows to USD 4.83 bn
Contracting for the fifth straight month, India’s exports slipped 10.21% to US$23.64 billion in July, on account of decline in the shipments of petroleum, leather and gems and jewellery items, according to the government data released on 14th August. However, the outward shipments in July recovered from a steeper decline of 60.28% in April, 36.47% in May, and 12.41% in June. The country’s imports too dipped 28.4% to US$28.47 billion in July, leaving a trade deficit of US$4.83 billion, compared to a shortfall of US$13.43 billion in the same month last year, as per the data.
'Need for fiscal stimulus for exports sector'
Exporters’ association FIEO viewed that there is an urgent need for an export fiscal package so as to revive foreign trade of the country. FIEO President Mr. Sharad Kumar Saraf said that as the global trade forecast still shows a gloomy picture, there is an urgent and immediate need for a special exports package for reviving India’s foreign trade. Besides creation of an Export Development Fund with 1% corpus of the total value of exports during the last fiscal, MEIS of 2% across the board and 4% for labor-intensive sectors and addressing “risky exporters” issues apart from quickly deciding on RoDTEP rates are some key concerns, which should be immediately considered to give a much-needed boost to the exports sector and the overall economy, he added.
India's seafood exports pegged at 12,89,651 MT in FY 2019-20
India shipped 12,89,651 MT of seafood worth Rs. 46,662.85 crore (US$6.68 billion) during 2019-20, largely cushioning the adverse impact of the COVID-19 pandemic, the Marine Products Export Development Authority (MPEDA) said on 17th August. Frozen shrimp remained the major export item in terms of quantity and value followed by frozen fish while the USA and China turned out to be the major importers of India’s seafood
Engineering goods exporters seek govt intervention to bring domestic steel prices down
Engineering goods exporters have voiced their concern against rising domestic steel prices following the imposition of anti-dumping duties on steel imports from China, Vietnam and South Korea earlier this year which they say was rendering their shipments non-competitive in the global market. Immediate intervention of the government has been sought by the Engineering Export Promotion Council of India, the representative body of engineering goods exporters, to check the sharp increase in steel prices, according to an official release of the council circulated on 20th August.
Garment exports begin to move northwards
After witnessing a sharp decline in April, readymade garment exports have started picking up. Though statistics are yet to match the previous year’s levels, the exporters have heaved a sigh of relief, especially in Ludhiana, which contributes 15-20% to the country’s exports. In April, garments worth Rs. 962.92 crore were exported as compared to Rs. 9,786.03 crore in April last year. As industrial activity gathered steam, the exports rose to Rs. 3,908.80 crore in May, Rs. 6,083.70 crore in June and Rs. 7,973.06 crore in July.
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