The Federation of Indian Export Organisations (Fieo) said the continuous fall in exports in the last 11 months is in line with global trends. However, Fieo expressed concern over decline in non-oil imports which does not augur well for domestic manufacturing.

The drop in non-oil imports of 24.5% is also on account of lesser import of capital goods and machinery which will affect production in the long run and may create supply side constraints once global demands pick up, they say.

Similarly, EEPC India also expressed serious concern over the drop of India’s exports by 28.4% in July. EEPC India said unless exports pick up, it would be difficult to envisage GDP growth crossing the 7%-mark and thereafter moving even further up.

Fieo president A Sakthivel said, “Except Germany, all countries across the globe are showing negative growth on year-to-year basis. The trend is likely to reverse from December-January when the global economy improves and orders factoring the benefits extended under the new Foreign Trade Policy materialise in to exports.”

President Fieos reiterated the necessity to increase duty drawback rates immediately and regulate high banking and other charges.

EEPC India chairman Aman Chadha Chadha noted, “While the new Foreign Trade Policy did take many positive initiatives, members of EEPC India had stated there were two crucial problems they were facing in global markets. The first was that since the Chinese government had given better fiscal incentives, their exporters were able to compete on the price front better vis-a vis Indian exporters, while secondly, in growing markets in Africa and Latin America, China had FTAs with countries in this region, while India either did not have any such arrangements or had at best a PTA and this was insufficient to face the onslaught from the Chinese exporters in these countries.”

Chadha hoped that while it may take sometime to counterbalance the above two factors, perhaps, India could lower transaction costs by ensuring that there is less administrative hassles for the exporters and also by lowering the cost as well as ensuring greater access to credit by ensuring timely VAT refunds and unutilised Cenvat Credit refunds.