FIEO points out liquidity crunch for paying GST as reason for exports decline
November 15, 2017: Reacting to the export data for the month of October, 2017, Ganesh Kumar Gupta, president, Federation of Indian Export Organisations (FIEO) said that the fall was expected as exporters particularly MSME were facing liquidity problem to pay GST for four months in a row without getting any refund. Gupta said that there is immediate need for remedial measures to prevent further decline in exports otherwise the situation may be worse for November, 2017. Implementation of the measures approved by GST Council is not taking place as a result challenges faced by the exporters remain the same, added FIEO chief.
There is sharp fall in major labour-intensive sectors like leather & leather products, gems & jewellery, handicrafts, readymade garments, carpets etc. The decline in these highly employment-intensive sectors is a worrisome sign observed Gupta. The exports figure for the month of October, 2017, for the first time after 13 months in a row, have shown negative growth of 1.12 percent added Gupta as still 18 out of 30 major product groups, were in positive territory.
He also said that WTO’s latest World Trade Outlook Indicator (WTOI) also suggests that global merchandise trade growth will likely moderate in the fourth quarter of 2017. FIEO President further added that exports should be out rightly kept out of the purview of GST as paying the tax first and getting refund is cumbersome, complex and complicated affecting exports.