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Coronavirus impact on India’s export sector

Responding to a nominal decline in January exports by 1.66% at USD 25.97 billion during the month, FIEO President, Sharad Kumar Saraf said that global and domestic factors have again pull-down the monthly exports.

As the Corona Virus hits China, global and domestic factors again pull down monthly exports. Protectionism & liquidity concerns coupled with spread of the Coronavirus in the world’s second-largest economy.

Sharad Kumar m said that situation in China has further worsened the global sentiment and exporters are delaying their shipments. Other key factors including trade war, the tension between Iran and the US and slowdown in economies across the globe have also exaggerated the problem for India’s exports sector.

With major global players including China, which is now facing an epidemic like situation, is not only losing its sheen in exports but has dented its economy in a big way. The Indian exports are also passing through a very tough and challenging times as the currency volatility besides fluctuations in commodities prices including that of crude have also led to the nominal increase in exports of petroleum, which is a major constituent of India’s exports, FIEO chief Sharad said.

Only 10 out of the 30 major product groups were in positive territory during January 2020 including electronic goods, drugs & pharmaceuticals, organic & inorganic chemicals, iron ore, oilseeds, ceramic products & glassware, man-made yarn/fabs/made-ups, cotton yarn/fabs/made-ups, handloom products have shown some positive or nominal growth.

However, all other major sectors of exports including almost all labour-intensive sector of exports are still in negative territory. Further imports of USD 41.14 billion with just a marginal decline of 0.75 percent during the month has this time not come as a respite for the economy.

Talking about the domestic issues, Sharad Kumar said that domestic issues including uncertainty over MEIS Scheme has been a major cause of concern as exporters’ claim for about 6 months are still pending, which has completely wiped out their liquidity and has kept them in doldrums with regard to finalising new contracts. The problem of risky exporters has further compounded the liquidity problem as their GST and Drawback claims have also been held up.

President FIEO reiterated that the stalemate over MEIS for apparels and made-ups should be resolved immediately. Besides, RoDTEP should be notified with immediate effect for all the products with lead time of at least 3 months now so that exporters may factor the same in finalising new orders and making their transition to the new scheme smooth while continuing with MEIS in the interim period.
Source: KNN

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