Merchandise exports from the country contracted the most in more than three years in September. According to data released last week, exports declined 6.57 percent y-o-y to $26.03 billion in the month. This is for the third time that exports declined in the current financial year while imports dropped for the fourth consecutive month. No doubt, rising protectionism and trade wars are affecting India's trade prospects.
The September trade figures show that only 8 out of 30 major product groups were in positive territory. All other major sectors of exports including almost all labour-intensive sectors besides petroleum were in the negative. This is a real concern. The WTO has already cut its global trade forecasts for both 2019 and 2020, and the situation may worsen further with the ongoing US-China trade war, Brexit crisis and developments in Iran and Turkey.
The export sector has not been doing well for quite some time, and now the situation is aggravating further due to worsening global trade, making it essential for the government to intervene at the domestic front. An exporters’ body has opined that rising raw material prices and lack of low cost credit need to be tackled. Some others have called also for interest equalization support to all farm exports, benefits on sales to foreign tourists and quick refund of GST, etc.