Believe we have reached the bottom of slowdown in exports, says FIEO

The ongoing trade tensions and weak global demand took a toll on India’s exports in June. Commerce ministry data shows merchandise exports dropped 9 percent while imports fell 10 percent in June.

Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership, and Sharad Kumar Saraf, President of the Federation of Indian Export Organizations (FIEO), spoke to CNBC-TV18 about the trade data.

"There were signs that growth was weaker last month. The decline in both imports and exports was more than anticipated," Upadhyay said on Tuesday.

“Certain segments such as machinery which are less sensitive to price variations are weaker; weaker gold and oil imports are about 70 percent of the sequential fall. So there is some offset but cannot dispute that there are signs of growth weakness in trade numbers,” he added.

Talking about the exports, Upadhyay said, “The exports which have suffered the most over the last 3-4 months are technology.”

“It’s the commodity exports which have been hit less. The latest numbers are signs that even commodity exports are starting to get hit, there is a worry for emerging markets (EMs), which depends more on this segment for driving growth,” he said.

According to him, India has been an outperformer when it comes to export growth.

“I am not very pessimistic. I think the data would not get worsen. At best it will remain where it is,” said the president of Federation of Indian Export Organizations.

He believes India has reached the bottom of the slowdown in exports.

“The issue at the moment is both steel prices and crude prices are going down. Last year we blocked 34 percent reduction in steel export and that continues. This is one reason why we are seeing a larger decline,” added Saraf.

According to him, global conditions have worsened due to US-China tariff tussle.

Talking further on exports, he said, “We are not able to export because of lack of credit; the goods and services tax (GST) refunds are not coming. We need quick GST refund which is now a very large amount of money.”