Exports to rebound in 2020 but growth to remain subdued
New Delhi: The continuous contraction in India's exports is likely to stop next year but the rate of growth will be subdued on account of the uncertain global trade situation due to rising protectionism.
Commerce Secretary Anup Wadhawan said the current slowdown in exports is mainly due to a decline in petroleum products, which constitute 13.42 per cent of overall outward shipments.
This decline, he said, is mainly on account of fall in petroleum prices which has driven the export value downwards.
However, "the positive growth in the exports of non-conventional commodity groups like electronic goods, drugs, and pharmaceuticals, organic and inorganic chemicals, augurs well for future growth," he told PTI.
India's export growth is in the negative zone since August 2019 due to a steep fall in shipments of key sectors like petroleum, engineering and gems and jewellery.
Labour-intensive sectors such as carpets, ready-made garments, handloom and leather too are recording decline in export growth.
As per the World Trade Organization (WTO), global merchandise trade volumes are expected to rise by only 1.2 per cent in 2019, substantially slower than the 2.6per cent growth forecast in April 2019.
However in 2020, the growth in trade volume is projected to accelerate to 2.7 per cent.
Apex exporters body Federation of Indian Export Organisations (FIEO) said the global situation is becoming extremely challenging as rising protectionism is leading to uncertainty.
FIEO Director General Ajay Sahai said the global situation is likely to improve in the first half of 2020, which would have a positive impact on India's exports.
"If the global situation improves, which is likely in the first half of 2020, we may look for 15 per cent growth in exports in the next financial year (2020-21). Exports will come out of negative zone next year but the rate of growth will not be in double digits," he said.
He added that the order book position of Indian exporters is encouraging and less volatility in the domestic currency has also been a positive factor for traders.
Sahai also said that Indian exports have to be aligned with changing import patterns of the global economy as 50 per cent of the world imports today is accounted by electrical and electronics products,
automobiles, machinery, petroleum products and plastic items.
"While employment-intensive sectors should be pushed in exports, the new strategy should focus on technology-driven sectors," he said.
Sharing similar views, Professor Rakesh Mohan Joshi from the Indian Institute of Foreign Trade (IIFT) said the steps taken by the government would help exports record growth in 2020.
"There is a need to take structural reforms to increase the competitiveness of Indian products in the global markets," Joshi said.
(Image from livemint.com)