Exporters seeking bailout from govt

NEW DELHI, INDIA: Reeling under the economic slump in the US, a sovereign debt crisis in Europe and a sluggish economic growth in Japan, the exporters in India are expecting the government to announce an amnesty scheme to bail them out of the current crisis in international markets, the Assocham said .

The industry body conducted a random survey of exporters with a well-diversified presence across Asia, Africa, Europe, US and other prominent centres across the world.

Also read: India's Exim Policy 2010 - 2011

It also interacted with nearly 500 exporters based out of Ahmedabad, Bangalore, Chennai, Delhi and Mumbai during mid-September and November to ascertain the impact of global economic slump on India’s exports more so as US and the European Union together account for about 35 per cent of India’s aggregate exports.

“Consequences of slowdown in global economy on exports from India are very much apparent as the growth of exports from India fell to a meagre 11 per cent in October 2011 as against about 36 per cent in the last quarter of the current fiscal,” said D.S. Rawat, secretary general of Assocham while releasing the findings of the survey.

“Exporters across India are finding it extremely difficult to fulfill their export obligations due to a grim scenario in the global markets and have urged the government to come to their rescue as the situation is going beyond their control,” added Rawat.

“In order to stimulate exports and check trade deficit the government should provide finance to exporters especially those from small and medium sectors at concessional rates,” said Rawat.

Nearly 75 per cent of the respondents said that their exports have been suffering a severe downfall ever since the sub-prime crisis of 2008-09 and are looking forward to certain significant steps by the government to boost exports from India.

About 40 per cent of respondents said that exports might slow further and demand might slacken amid persisting global economic crisis.

Majority of exporters said that current global economic turmoil has pushed the trade deficit to record low hurting the demand for Indian goods in advanced economies.

Nearly 25 per cent of exporters said that government’s efforts to promote exports to markets like that in Africa have definitely eased the pressure a bit but demand contraction in traditional markets like the US and Europe is the crux of their worry.

Besides, nearly 30 per cent of respondents also said that recent sudden depreciation of rupee against major currencies might help Indian exporters maintain their competitiveness to some extent.

“Indian manufacturers must take an advantage of weakening rupee and downward movement of global economies like China and must exploit this opportunity to boost exports and make Indian goods globally more competitive more so as manufactured goods account for over half of India’s total exports,” said Rawat.

About 55 per cent of respondents said that inflation might rise further and will lead to unregulated price hike in input costs and push the price of labour upwards.

According to an Assocham analysis, India’s share in global exports is likely to fall from 10 per cent in the current fiscal over the last fiscal.