| May exports dip 30% | |
| BS Reporter / New Delhi June 04, 2009, 0:11 IST | |
Exports contract for the eighth consecutive month.
Overseas sales of Indian goods have contracted for the eighth month running during May, and stood at nearly $10.9 billion, which is an annual dip of 30 per cent. Exporters have been asking the government to dole out fresh fiscal measures to deal with this slowdown and met Commerce Minister Anand Sharma today with their list of demands.
The May numbers are the initial estimates available with the commerce ministry, while the real extent of exports will be known by July 1. The latest numbers are a notch better than the 33.2 per cent contraction ($10.74 billion) seen in the previous month, but far worse than the 27.3 per cent ($15,58 billion) expansion seen in May 2008.
The period of unprecedented exports’ dip since October 2008 is one of the longest in India’s trade history. A similar contraction was seen for six months at a go between July and December 2001.
In 2008-09, exports expanded by 3.4 per cent — the lowest since 2000-01 — and stood at $168.7 billion. The contraction in exports is expected to continue till about September. While commerce ministry expects flat growth in exports during 2009-10, exporters claim that they can manage $200 billion worth of exports, if government supports them with incentives in the coming budget and foreign trade policy.
The dip in exports is primarily due to lesser orders from advanced countries in the west, which are hit by the global recession. Exporters claim they have been getting enquiries about potential orders, but they are not translating in to deals.
With a shrinking overseas market, exporters from countries like China, or South-East Asian nations are offering heavy discounts. Indian exporters are also asking for government help so as to make their products competitive in the international market.
After meeting Finance Minister Pranab Mukherjee yesterday, exporters today met Commerce Minister Anand Sharma with their wish list. Their demands broadly include exemption from taxes and duties, cheaper interest rates for export credit and enhanced export incentives.
Assuring that the government will take adequate steps to mitigate this slowdown, Commerce Minister Anand Sharma today said: “The purpose of the incentives will be to bring the costs down. I will be meeting Finance Minister Pranab Mukherjee soon and make specific recommendations.”
He also said the government will take additional steps to help exporters in the Foreign Trade Policy, which will be unveiled in August.
Apart from fiscal incentives, exporters have also asked for constitution of an “Exports Facilitation Board” under the chairmanship of prime minister to monitor the slowdown. The Federation of Indian Export Organisations today proposed that this board should have the commerce minister, finance minister, textile minister, surface transport minister, minister for shipping, minister for labour as members, along with the FIEO president and other prominent exporters.
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