'Radical policy changes needed to spruce up exports'

Reacting to the trade data for the month of January, 2015 which showed a double digit decline(-11.19%) in exports on the heel of single digit decline in December, 2014, President, Federation of Indian Export Organizations (FIEO) said that the present trend is an indication that the export target of US$ 340 billion for 2014-15 would not be achieved. Ahmed said that in the given scenario, we would be happy, if we touch export of US$ 325 billion in this fiscal.

 FIEO Chief said that while contraction in global demand and softening of crude and COMMODITY PRICES have impacted exports, the domestic factors did play some role. Ahmed said that the non-availability of Interest Subvention coupled with high cost of credit has dissuaded micro & small exporters to continue in exports. The uncertainty of policy front has also been a demotivating factor as exporters are unable to do their costing and take a call on future exports.

 Almost all sectors have exhibited a decline trend including tea-coffee, rice, spices, tobacco, oil meals, cereals preparations, marine goods, meat & dairy products, gems & jewellery, drugs & pharmaceuticals, organic & inorganic chemicals, electronic goods, textiles (other than RMG), jute, plastic products and petroleum products.

 Cautioning on the import side, which showed 11.39% decline, he said that while decline on account of crude prices is understandable, the negative growth in import of machinery both electrical & non-electrical, project goods and key inputs such as precious & semi-precious stone, ferrous metal, organic & inorganic chemicals, etc. do not augur well for country’s manufacturing.

 According to him, Indian exports are hovering around US$ 300 billion from the last 4 years starting from 2011-12. This suggests that far radical changes are required both in the Union Budget and the Foreign Trade Policy to support the export sector failing which decline will be difficult to arrest in view of emerging global scenario.