The free fall of India’s exports is likely to end soon, if an internal assessment of commerce ministry is to be believed.
Top officials in the commerce ministry are confident that exports will recover in the second-half of this fiscal, led by a combination of various factors such as rising commodity prices (especially crude and metals), comfortable position of the rupee against the dollar and other currencies, demand pick up in off shore markets along with the fading base effect.
According to the sources in the commerce ministry , “the green shoots in exports will be visible in the second-half of the current fiscal. The assessment is that crude prices and metal prices firming up will help, also the current exchange rate, or the value of rupee vis-a-vis other global currencies is quite healthy.”
India’s exports have been slipping for the last 17 months, recording a decline of 6.74% in April due to a sharp fall in shipments of petroleum and engineering products amid tepid global demand.
The decline has been so sharp that more than half of the 30 sectors closely monitored by the trade ministry were in the negative zone in March. These include top exported items -- petroleum products, textiles, man-made yarn and fabrics, engineering and leather.
Decline in the outbound shipments of these sectors is the reason why the country’s overall merchandise exports have been falling. The entire last fiscal also saw a decline in exports. The total merchandise shipments in 2015-16 fell by 15.85% to $261.13 billion, a five-year low figure.
“The ministry and (commerce minister) Nirmala Sitharaman herself are closely watching the movement in all these sectors, with a monthly review,” sources said.
The assessment was made amid rising fears that if the fall in exports continues then it would soon start resulting in job losses and creating a pressure on the current account deficit, sources said.
Besides, even the Prime Minister’s Office and the finance ministry wanted the commerce ministry to have estimates ready so that as and when the need arises corrective measures can be rolled out.
“In many sectors, volumes have grown, but due to the exchange rate the values do not show a growth. But, we expect growth to be back in values soon,” sources said.
Recently, when finance minister Arun Jaitley was in the US, he had expressed concern over slowing exports, saying “one of the biggest areas of worry has been the declining exports.”