Govt says decline due to base effect; exporters want higher credit flow
After a positive run in the first five months of this fiscal, the country’s goods exports fell 2.15 per cent to $27.95 billion in September 2018 (year-on-year). The government is hopeful that the decline is temporary, owing largely to a high-base effect.
Imports registered an increase of 10.45 per cent to $41.9 billion during the month, bringing down the trade deficit to $13.98 billion, according to data released by the Commerce Ministry on Monday.
“The decline in exports is a temporary phase. In October, we will see good growth in dollar terms and will match the current trend,” Commerce Secretary Anup Wadhawan told reporters.
Wadhawan pointed out that export growth was down in September 2018 as in the comparable last month there was an abnormally high growth of 26 per cent due to the cut-off for drawbacks at pre-GST rates.
According to exporters’ body FIEO, overall exports in September at $28 billion is the minimum needed to reach the $350-billion mark milestone in 2018-19.
“We reiterate our demand for augmenting the flow of credit to the export sector as a sharp decline in credit does not augur well for the future when exports are growing in double digits,” he said.
Despite the fall in exports, a number of items posted an increase, including petroleum products, chemicals, drugs & pharmaceuticals, cotton yarn & fabric, handloom products and plastic.
In the first six months of the current fiscal, exports posted a growth of 12.5 per cent in dollar terms. Imports grew 16.1 per cent.
Last month, the Commerce Ministry had roughly estimated export growth for 2018-19 to be about 16 per cent, which was the average growth figure for the April-August 2018-19 period.
Exports grew 9.8 per cent in 2017-18 to $302.84 billion.