Showing an impressive growth of 48% in June 2021, for the fourth time in a row, the commitment and dedication of the exporting community in these difficult and challenging times shows the vigour and dynamics of the industry, says the newly appointed Dr. A. Sakthivel, President, FIEO.
What is your take on exports showing such meteoric rise?
The highest-ever quarterly growth in exports of over 85% with US$ 95 billion over FY’ 2020-21 and by about 18% over FY’ 2019-20 not only shows the resilience of the exports sector but also the inherent strength of the Indian economy. It is the commitment and dedication of the overall exporting community, who in these difficult and challenging times have continuously been able to perform with such vigour and dynamism. Exports for June 2021, for the fourth time in a row, have also shown a very impressive growth of 48% with US$ 32.5 billion during the month, this augurs well for the overall foreign trade sector of the country. Of course, the stupendous export growth witnessed during the months of April, May and June 2021 and also for the first quarter as a whole has been quite impressive and has provided impetus to the overall economic growth, but we need to keep up the momentum. Our assessment on the order booking position of our exporters is not only extremely good but also the gradual opening up of major global markets and improvement in the situation in the country is expected to further push exports growth.
The government aims to export goods worth US$ 400 billion in the current fiscal, though it looks a little ambitious but certainly achievable. We as trade and industry would definitely like to partner with the government to reach this milestone.
How has the state-wise lockdowns impacted the growth trajectory?
As the overall global demand has remained buoyant, the partial lockdowns in different parts of the country and states have kept factories running at half strength in most of the states. Some states treated exports as essential services and allowed them to run seamlessly. Moreover, there was no restriction on movement of cargo during the second lockdown. With the decline in daily cases of infection and resumption of economic activities across the different parts of the country and the states, India is now set to achieve an all-time high export figures for the financial year. With such a growth trajectory showcased by the exports sector, the country’s economic recovery will be likely led by exports especially from MSMEs.
How will labour-intensive sectors help in creating jobs?
The top sectors, which performed impressively during the first quarter of the FY’ 2021-22 starting with 3-digit growth were Iron-ore, Rice, Cotton Yarn/Fabs/Made-ups, Handloom Products etc., Engineering Goods, Plastics & Linoleum, Organic & Inorganic Chemicals, Electronic Goods, Petroleum Products, Marine Products and Drugs & Pharmaceuticals. The country’s exports basket is a nice mix of labour-intensive traditional and sunrise sectors of exports. We need to follow the twin strategy of promoting both as the former is crucial for job creation while the latter is the plank for exponential growth. The focus on sustained economic development emanating from the pandemic is pushing exports of handmade, organic and traditional products. The One District One Product (ODOP) announced by our Prime Minister is helping in bringing focus at the district level which directly contributes to exports. These developments will give further fillip to job creation in the country.
Is there a change in the customer behaviour under the new normal?
The new normal during COVID-19 pandemic has been the digitisation and more and more usage of online mode of operations for trade and businesses across the globe. While the pandemic may take a little more time to settle, we are moving ahead with our vision of export promotion and handholding of trade and industry especially for MSMEs through virtual mode only, organising online shows/exhibitions/B2B meetings and should quickly shift gears to physical one once the situation improves.
The virtual shows are quite cost-effective costing less than 10-15% of participation of a physical show which is ideally suited to MSMEs. Further with the aim of promoting exports, a virtual platform will be soon created within FIEO to showcase products of our member exporters for export promotion focusing on new countries and new products. With these services being offered by FIEO, more and more exporters especially from the MSME sector have started taking the benefits of these services being offered by the Federation both as buyers and sellers.
What are the expectations from the government?
The government has announced a slew of measures during recent times to support exports with the extension of Interest Equalisation Scheme by three months to September 30, 2021 and the announcement on revised guidelines for MSMEs with the inclusion of retail and wholesale trades as MSMEs, which will help 2.5 crore traders to get benefit of priority sector lending under RBI guidelines. Besides, the recent key announcement on continuation of RoSCTL benefits to apparel & made-ups is a huge support for the sector. I would like to compliment the government especially the Hon’ble Union Finance Minister, Commerce & Industry and Textiles Minister and MSME Minister under the able and dynamic leadership of the Hon’ble Prime Minister, Shri Narendra Modi for the continuous support to the sector during such challenging times.
The need of the hour is to soon notify the RoDTEP rates to remove uncertainty from the minds of the trade and industry, besides addressing some of the key issues including release of the necessary funds for MEIS and clarity on SEIS benefits, resolving risky exporters issues, continuance of seamless refund of IGST, announcement of the new Foreign Trade Policy, resolving the issue of container shortage and higher freight and last but not the least continuing with the facility of IGST option for exports to get quick refund of GST.