FIEO President cautions of lower exports in last quarter of 2017

August 16, 2016: The exports figure for the month of July, 2017, once again showed positive growth, said FIEO President Ganesh Kumar Gupta. Engineering goods, petroleum, organic & inorganic chemicals, marine exports, plantations were some of the sectors, which contributed to the positive growth in exports during the month. However, the growth during the month was of concern as among major product category which includes gems and jewellery, drugs and pharmaceuticals, carpets and RMG including textiles further declined as compared to June, 2017 though more than half of the sectors, 19 out of 30 major product groups, were in positive territory. FIEO President further reiterated that the need of the hour is the sectoral analysis which should be initiated soon to pin point factors responsible for decline in such sectors. While there was some relief on the import front as the growth in imports was little less compared to last month yet the trade deficit ballooned from $26 Billion in April-July 2016 to $51 Billion in the corresponding months in 2017.

Gupta further added that the major concern of the exporters in the current GST regime is the liquidity crunch, which should be immediately addressed by providing across the board offsetting of high cost of credit and timely carry forward of taxes from pre-GST and expeditious refund. Besides high cost of credit which has been blunting the competitive edge of exports, restriction on inter-state job work from unregistered suppliers are also some of the other major issues which should be looked into by the government.

FIEO Chief cautioned that the order booking position from October onwards is not very promising and the appreciation of Indian Rupee with increasing pressure on liquidity under GST may affect exports in the last quarter of 2017 bringing exports to about $310 Billion in the current fiscal.