With export growth refusing to pick up pace, Finance Minister Nirmala Sitharaman and Commerce and Industry Minister Piyush Goyal will discuss challenges faced by the country’s exporters including lack of adequate export credit, complexities of trade with free trade partner countries, fall in domestic competitiveness and inadequate logistics in a meeting of the Board of Trade on Thursday.
“India’s export sector is facing a slowdown in tandem with the sluggishness in global trade. The government realises that it needs to take steps to give the sector a boost as a drop in exports not only brings down GDP growth but also causes large scale employment loss. The BoT will focus on ways around the problems to try and put export growth back on track,” according to a government official.
The Board of Trade, which also includes senior industry members, advises the Commerce and Industry Ministry on policy measures connected with the Foreign Trade Policy with the objective of boosting India’s trade.
India’s exports in April-July 2019-20 contracted 0.37 per cent to $107.41 billion. In July figures showed a meagre growth of 2.25 per cent as exports of many major commodities such as petroleum, gems & jewellery, engineering goods and leather registered a decline.
Declining credit for the export sectors is seen as one of the biggest factor hindering a bounce-back in exports. “A senior official from the Export Credit Guarantee Corporation will give a presentation on the credit flow to the export sector and how the problem facing exporters could be addressed,” the official said.
According to the latest RBI data, banks’ export credit declined 36.1 per cent year-on-year as of June 21, even on a low base. Non-food bank credit, however, grew 11.1 per cent and overall priority-sector loans rose 10.2 per cent in the same period.
Problems faced by exporters and the domestic industry due to the complexities of the free trade agreements signed by India with partner countries such as the ASEAN, Japan, South Korea and Malaysia will also be discussed. The industry is also likely to discuss the possible negative impact of the Regional Comprehensive Economic Partnership (RCEP) agreement India is negotiating with 16 countries including the ASEAN and China, the official added.
Other issues that are scheduled to be discussed at the BoT meeting include need for import substitution, enhancing domestic competitiveness, leveraging government e-marketplace (GeM), improving logistics and monitoring of infrastructure projects.
The Board of Trade advises the Commerce and Industry Ministry on policy measures connected with the Foreign Trade Policy in order to achieve the objectives of boosting India’s trade.