Third consecutive increase in merchandise exports, while going through extraordinary logistic challenges, shows the resilience of the sector: FIEO President

Mr Kumar said that had it not been for the logistics disruptions such as lack of container availability, shipping space, irregular shipping schedule and ships skipping Indian ports, the exports would have recorded close to double-digit growth in June 2024. 

President FIEO added that the continuous hard work put in by the exporting community is paying dividends though there is also slowdown in demand from several key markets, reflected in sluggish growth projections. Mr Kumar, however, reiterated that he is optimistic of better growth numbers with improved demand coming in from the European Union, UK, West Asia and the US in months to come, which will not only further give a boost to the overall order bookings but also to the labour-intensive sectors of exports.

FIEO Chief said that key sectors which have shown positive growth during the month of June 2024, include engineering goods, electronic goods, drugs & pharmaceuticals, organic & inorganic chemicals, plastics & linoleum, cotton yarn/fabs./made-ups, handloom products etc., man-made yarn/fabs./made-ups, handloom products etc., cereal preparations & miscellaneous processed items, iron ore, mica, coal & other ores, minerals including processed minerals, ceramic products and glassware, RMG of all textiles, tea, coffee, rice, tobacco, spices, carpet and fruits & vegetables.

Our exports to eight of all our top ten markets including US, UAE, Netherland, UK, Saudi Arabia, Bangladesh, Germany and Malaysia were positive except with minor declines in China and Singapore, also with many of them recording healthy double-digit growth.

Month-on-month merchandise imports during June 2024 was US$ 56.18 billion with growth of 4.9 percent, taking the trade deficit for the month to US$ 20.98 billion, said Mr Ashwani Kumar. However, a negative trade balance is not always bad, if a country is importing raw materials or intermediary products to boost manufacturing and exports, added FIEO President.

FIEO President, Mr Ashwani Kumar further reiterated that the need of the hour is to take steps on the liquidity front with deeper interest subvention support and extension of interest equalisation scheme for 5 years. Besides, addressing the Middle East geopolitical situation, Red Sea challenges by ensuring availability of containers, marine insurance and rationale increase in freight charges. The sector also needs easy & low cost of credit, marketing support and conclusion of some of the key FTAs with UK, Peru and Oman soon.