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From the President’s Desk…..
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My Dear Fellow Exporters,
Trade data for January 2008 has been released. It shows 20.47% export growth in January 2008 as compared to the corresponding month last year, taking April-January 2008 exports to US$ 124 billion with 21.62% growth. If the data for the first 10 months is any indication, we are on way to miss the export target of US$ 160 billion. Yet, I would like to compliment my exporter friends for showing resilience in a year when our currency appreciated by over 12% against dollar and when our major export destinations witnessed slump in demand. Fortunately, rupee has become stable for the last two months, but for the time being we have to keep our fingers crossed.
I was invited by the Parliamentary Standing Committee of Commerce to suggest Federation’s views on demand for grant for 2008-09. Many of my esteemed colleagues in the Managing Committee also joined me during the discussion. We made it clear before the Committee that the export data was not reflecting the true story, as the growth was mainly driven by exceptional performance by select sectors like gem & jewellery, petroleum and engineering goods. Moreover, increase in the international price of gold by 30%, crude oil by over 40% and steel by 20% also led to higher value realization for these sectors. On the other hand, employment generating sectors like textiles, marine, leather, handicraft, agro & processed food, plastics & linoleum products and plantation crops like tea and coffee were witnessing negative or single digit growth, which might have serious implications for employment, we warned the Committee.
Numerous restrictions have been imposed on export of commodities with a view to containing inflation. Exporters of rice, edible oil, pulses and other agro-commodities are incurring losses and are at the verge of losing their market due to ad hoc policy announcements made by the government from time to time. The better way could have been to estimate consumption against production and augment the shortage through duty free imports.
A cloud of uncertainty continues to hang over DEPB scheme, despite its extension. Exporters are unable to do long-term planning. The Federation is of the view that the scheme should continue till 2010 when GST will be introduced.
Since budget disappointed the exporters, we all are eagerly looking for the announcement of Foreign Trade Policy on 11 April. We are confident that the Commerce Minister will consider the suggestions submitted by FIEO and other export promotion councils, commodity boards & authorities to restore competitiveness of export sector while announcing the Policy.
AT the end, let me add a word of caution. With a projected slowdown in world trade, stagnation in US market and decline in growth in EU & Japan, the road ahead for us will be more challenging. Yet, I believe, when the going gets tough, the tough gets going.
Yours
sincerely,
Ganesh Kumar Gupta
PRESIDENT
