India not insulated from global development , tough times lies ahead: M Rafeeque Ahmed, President, FIEO
FIEO/PUB/PR /56/12 - June 1, 2012
India not insulated from global development , tough times lies ahead:
M Rafeeque Ahmed, President, FIEO
Reacting to the trade data for the month of April, 2012 showing miniscule growth of about 3%, coming on the heel off negative growth in March,2012, Mr M Rafeeque Ahmed, President, FIEO said that the impact of global contraction in trade is now being felt by India as well. The situation is more grim now as in the past periods of slowdown, the emerging and developing economies exhibited positive growth helping us to increase our exports through market diversification strategy focusing on Latin America, Africa, and Asia. The slowdown in new markets will be more obvious in next few months added FIEO Chief.
The more disturbing news, observed Mr Ahmed, is sharp decline or moderate growth in exports of labour intensive sectors like Gems & Jewellery (-25.7%), Readymade garments (-9%), Leather (+3.2%), Electronics (+5.4%), Plastics (+2.7%), etc. This will have serious implications on employment and may lead to sharp reduction in additional job creation and even lay off. These figures also underline the fact that there is no direct relationship between exports growth and depreciation, and stable exchange regime is more beneficial for exports rather than high volatility in the currency market.
President, FIEO asked the Government to devise suitable strategy to counter the export slowdown in the revised edition of the Foreign Trade Policy. Mr Ahmed asked for continuance of zero duty EPCG Scheme and immediate re-introduction of Interest Subvention besides restoring PCFC facility. He, however, expressed satisfaction with the decline in Gold & Silver imports (-33%) which will help in managing the increasing trade deficit.