The Department of Commerce and the DPIIT are working together to use Invest India, Indian missions abroad and several territorial divisions to focus on increasing exports to 40 countries which account for 85% of Indian exports. With headwinds still continuing in trade in the first two months of the current financial year due to slowdown and recession in many countries, Commerce Secretary Sunil Barthwal said that WTO data is showing a reduction in import demand by OECD countries even as India is banking on WTO's revised projection of 1.7% growth this year.
While EPCs (Export Promotion Councils) have told the government that demand will pick up once the accumulated inventory starts getting picked up, Barthwal pointed out that a 35.41% fall in India's total trade deficit for April and May 2023 shows a much higher decrease in imports than exports. India's imports from China have fallen 7.2% year-on-year in April and May 2023.
Describing the fall in trade deficit as a positive sign of India being able to contain imports more than the fall in exports, he said that strategic teams have been asked to focus on countries and product groups where there's a revival of demand even as India hopes for demand to rise from its major importers.
However, he described the global demand situation as grim in view of stagnant demand in China's construction sector, major defaults and debts in many African countries and a currency crisis in many south-east Asian countries.
With the US Federal reserve keeping its rates unchanged and western nations facing high inflation, as high as 11% in Europe, Barthwal expressed hope of a pick-up in industrial activity if Fed rates came down.
Noting a fall in demand for finished products, he explained that if inflation cools down in the US and rates are cut, demand is expected to pick up along with industrial activity.
Pointing to a rise in Indian exports to Italy despite disturbance in Europe due to an ongoing Russia-Ukraine war, he stated that the trade balance has tilted in India's favour with a fall in imports of gold and silver as well as a 4.01 percent growth in year-on-year services exports in April-May 2023 to $51.14 million.
While a 7 percent year-on-year growth has been noted in services exports for April 2023, the Commerce Ministry termed the statistic as bright while describing April as a slowdown month compared to March, where companies try to better their numbers by the end of the financial year.
Expressing satisfaction with the results of PLI schemes in electronics manufacturing, the Commerce Ministry said that the impact of PLI schemes is being seen in both export promotion as well as import substitution. The government is looking to forge alliances for investment and trade by taking part in global fairs like the World Food Show and the world spice conference for buyer-seller meets and for exhibition of Indian products.
With a focus on export promotion and import substitution being looked at in cohesion and not isolation, the government is looking to bring out an export strategy for this year, and intends to disclose the set targets once the volatility in the global market settles down.
Having witnessed a decline in merchandise imports except electronic goods, the Commerce Ministry said that the trade data for April and May saw a rise in imports of tur and urad dal due to low production and realised greater price on basmati rice exports.
(Edited by : Pradeep John)
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