Global economic contraction led to modest export performance in India
Manufacturing across the Euro Zone and the US has also contracted due to persistent policy tightening measures by both the US Fed and the European Central Bank squeezing finances.
Reacting to the overall August 2023 export figures of $34.48 billion (with a decline of 6.86 percent) compared to August 2022, Dr A Sakthivel, president, FIEO said that sluggish global economic contraction and demand especially in major economies like EU, UK and China coupled with the subdued growth in economies like US and Australia has led to such a modest performance in exports during the recent months.
Manufacturing across the Euro Zone and the US has also contracted due to persistent policy tightening measures by both the US Fed and the European Central Bank squeezing finances, added Dr A Sakthivel. As Asian economies are showing mixed bags, countries across the continent have struggled to maintain the momentum. The softening of commodity prices across the globe has also pulled down value-wise exports. Countries are showing a decline in exports including China whose exports have contracted by almost 9 percent in August 2023. Moderation in the pace of growth in merchandise exports significantly in 2023 has been mainly because of ongoing geopolitical tensions, disruption in the global supply chain due to the Russia-Ukraine war, monetary tightening and recessionary fears, which has continuously led to a fall in consumer spending across the globe especially in advanced economies, reiterated FIEO President.
FIEO Chief added that we are of the view that exports will start showing better growth numbers, as things are expected to improve in the next few months with more fresh orders coming and order bookings for the Christmas and New Year season.
15 out of 30 key product sectors, which have shown positive growth during the month of August 2023, include Iron Ore, Oil Meals, Ceramic Products and glassware, Electronic Goods, Cotton Yarn/Fabs./Made-Ups, Handloom Products Etc., Tobacco, Oil Seeds, Meat, Dairy & Poultry Products, Cashew, Fruits & Vegetables, Carpet, Cereal Preparations & Miscellaneous Processed Items, Engineering Goods, Drugs & Pharmaceuticals and Marine Products. FIEO Chief said that though the decline in imports is a good sign for the country, however, that has also led to de-growth in our key export sectors like petroleum products, gems & jewellery, organic & inorganic chemicals etc.
FIEO President further reiterated that the need of the hour is to provide further momentum to the economy through easy and low cost of credit to the MSMEs, long-pending demand for marketing support for promoting Brand India products and services globally and GST exemption on Freight on exports. Besides, the interest equalisation support across all sectors of export and providing further extension to the Emergency Credit Line Guarantee Scheme by one more year till March 31, 2024, will provide much needed cushion during such tough and challenging times. And last but not the least, greeting and congratulating the Hon'ble Prime Minister, Shri Narendra Modi, Dr Sakthivel said that with the grand and successful completion of the G20 Summit under the PM's dynamic and able leadership, the world has seen the growing diplomatic strength of India and the key role it plays across globe. In line with that the trade and industry would like to see important FTAs with UK and EU along with GCC Countries for which the negotiations are expected to be started soon, to see the light of the day to further provide much needed boost to the sector, said Dr A Sakthivel.