Decline in Indian Exports

Decline in Indian Exports Highlights

• Export: Exports declined to a 20-month low in October to touch $29.78 billion.
  • It is the first slide reported for any month since February 2021.
  • Export sectors that recorded negative growth: Gems and jewellery, engineering, petroleum products, ready-made garments of all textiles, chemicals, pharma, marine products, and leather.
  • India’s overall exports in April-October 2022 are estimated to be $444.74 billion, exhibiting a positive growth of 19.56% over the same period last year.
• Imports: Imports slowed to 5.38% to an eight-month low of $56.69 billion.
  • Overall imports in April-October 2022 are estimated to be $543.26 Billion, exhibiting a positive growth of 33.80% over the same period last year.
• Increasing Trade Deficit: Trade deficit is the gap between exports and imports.
  • It is estimated to be $29.78 billion.
  • It is 66% higher than in October last year.
  • A Decline in Exports in India and increase in imports widens trade deficit, putting pressure on the value of domestic currency.

Reasons for Decline in Exports in India

• Global slowdown: Slowdown in the EU & the U.S. and the Russia-Ukraine war has led to decline in demand across major markets.
• Tightening monetary policy in developed world: It puts less money in the hands of the people and therefore, consumption slows down.
• Export restrictions by India; Restrictions have been imposed by India on segments including wheat, steel, iron and petroleum products have also contributed to the slowdown in exports.
  • It was done to increase local availability and hence temper local prices.

Silver Lining for India

• Increase in Private sector capital expenditure: It is about to touch six lakh crore this fiscal which would make it the highest of the past six years.
  • This is expected to spur growth and job creation in the coming days.
• Resilient local demand: Spike in tractor sales in September and October reflects improved sentiment.
• Comfortable Foreign Exchange: For the week ended December 2, foreign exchange reserves stood at about $561 billion.
  • It will roughly suffice India’s 9-10 months’ worth of import cover.

Other Exporting Nations

• Vietnam recorded a 4.5% growth in exports from a year earlier to $29.18 billion amid sustained foreign demand.
• Exports by the Philippines grew 20% in October.

Steps taken by Government to Boost Exports

• Government has extended Interest Equalization Scheme on pre and post shipment rupee export credit upto 31-03-2024.
• Assistance has been provided in form of schemes such as Trade Infrastructure for Export Scheme (TIES) and Market Access Initiatives (MAI) Scheme.
• Implementation of Rebate of State and Central Levies and Taxes (RoSCTL) Scheme to promote labour oriented textile export.
• Implementation of Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.
• Government has launched Common Digital Platform for Certificate of Origin to facilitate trade and increase Free Trade Agreement (FTA) utilization by exporters.
• New Champion Services Sectors have been identified for promoting and diversifying services exports.
• Districts as Export Hubs has been launched by identifying products in each districts having export potential.
• Special support for domestic industry through various banking and financial sector relief measures, especially for MSMEs.

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