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  • MODERATOR:

    Hello and welcome to the webchat with Ishan Bakshi on when will India's exports pick up


    ISHAN BAKSHI:

    Good afternoon, everyone


  • R

    RAMANDEEP

    Will the GST Bill help in revising India's economy? If so, which sectors are likely to gain and why? Will it help small-scale industry and exporters as well?

    ISHAN BAKSHI

    The GST bill if cleared could lead to the creation of a single market. This will end up subsuming all major central and states taxes, including phasing out central sales tax. Manufacturers will get input credit. This could potentially help reduce the cost of domestically manufactured goods making them more cost competitive in global markets. This has the potential to boost exports.


  • R

    RAKESH

    Are we waiting for Make in India to see a jump in exports somewhere in future or do we actually have the inherent strength to see that push immediately?

    ISHAN BAKSHI

    An immediate turnaround in exports seems unlikely. This is because of two reasons. First, global demand continues to be sluggish and second because of low commodity prices. Various initiatives of the government such as improving the ease of doing business in India and improving infrastructure have the potential to boost exports. But the impact of these measures will not be felt in the short term.


  • V

    VENKAT

    Are the risks to India's economic rise more domestic than external? How can the exports pick up when the global economic growth is faltering? Do you think the government window-dressing the GDP growth, manufacturing and exports numbers?

    ISHAN BAKSHI

    Firstly, sluggish global growth is bound to impact India's exports. But one must remember that India accounts for roughly 2 per cent of global trade. So there is room to boost exports. One must also look at what is happening in China which accounts for a major share of global trade. With wages in China steadily rising, it is vacating certain product lines. South-East Asian countries are taking advantage of this. India can also take advantage of this. But this is conditional upon creating the infrastructure, improving the ease of doing business and raising competitiveness so that our exports can compete in the global market.


  • R

    RASHI

    India's exports dropped by a quarter in the month of September as against the same period last year implying a fall for the tenth straight monthly mainly on the back of sluggish global demand and sliding commodity prices. Which sectors are responsible for pulling down India’s exports?

    ISHAN BAKSHI

    If you look at the product wise export composition, almost all major segments have seen a sharp decline in exports. The biggest fall is that of petroleum and crude products. This is followed by ores and minerals, agriculture, engineering and electronic goods, leather goods, gems and jewellery and textiles. So, declines have been seen across all sectors


  • B

    BAUJI

    The US economy seems to be on a rebound, paving the way for a interest rate hike. Even though China is slowing a bit, isn't this good news for the global economy and Indian exports in particular, since the US imports most of its consumer goods?

    ISHAN BAKSHI

    All indications are that the US Fed will raise interest rates in December. This signals that growth is gaining traction. But there are also indications that the pace of interest rates hikes after December is going to be slow. This suggests that even though growth is picking up, it will remain well below its peak. As the US accounted for roughly 14 per cent of india's exports in 2014-15, some export segments such as high value textiles could see a boost. On the other hand, China accounts for only 4 per cent of India's exports. So the direct impact of a slowdown in China on India's exports is limited. An indirect impact though could be severe. This is because slow growth in China adversely impacts commodity exporting countries and other Asian economies which are more closely integrated into the chinese supply chains. Thus our exports to these economies are likely to be adversely impacted.


  • B

    BAUJI

    In your opinion, what are the top 3 obstacles that are keeping India exports picking up?

    ISHAN BAKSHI

    Sluggish global demand, low commodity prices, low levels of competitiveness.


  • M

    MALVIKA

    India’s export of agriculture and processed food products which saw a strong growth for the last five straight years has slipped by 9.8% in the current fiscal from a year-ago period in the name of health and safety regulations. Your views please.

    ISHAN BAKSHI

    Part of the decline in agricultural products is because of the decline in commodity prices. Commodities from cotton to sugar have all seen a fall in prices. Further, there have also been some curbs on rice exports. Another reason is that an oil for rice trade with Iran has ended. This too could have impacted exports data


  • M

    MICKEY

    Export of gems and jewellery from India has dipped over 18% during April-October due to declining prices of gold. When do you think it will pick up?

    ISHAN BAKSHI

    Given that commodity prices continue to remain low, an immediate turnaround seems unlikely. The last decade saw sharp increased in commodity prices. But given the slowdown in China, which accounts for a significant share of world commodity consumption, increases in commodity prices across the board are not expected in the short run, unless there are major supply disruptions


  • L

    LOKESH

    India's exports to outpace China by 2025, says HSBC. Do you think analysts are now giving forward looking optimistic reports without giving a clear picture of where the growth in exports are going to come from?

    ISHAN BAKSHI

    One must understand that all projections are based on certain assumptions. China is an export powerhouse. And despite rising wages, it continues to be the manufacturing hub of the world. Displacing it is not going to be easy. While India has the potential to boost its exports in labour intensive manufacturing, to what extent it is able to do so depends on a range of issues. How successfully we are able to improve our competitiveness, infrastructure and improve the ease of doing business will determine export growth, not to mention how global demand fares,


  • N

    NAREN

    What is your projection of growth in exports over the next two fiscals? Where is this growth or de-growth coming from?

    ISHAN BAKSHI

    If the current trend in exports persists, it seems unlikely that exports for the entire financial year 2015-16 will touch $300 billion. This is well below the target of $325 billion. If this were to happen, then exports would have contracted two years in a row. As Ive already mentioned, exports of all major segments have declined - from petroleum and crude products to agricultural products, leather, engineering and electronic goods, textiles and gems and jewellery


  • MODERATOR:

    Thanks, Ishan for your time. We also thank our readers for sending in questions.


    ISHAN BAKSHI:

    Most welcome


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