There has been significant decline in the
exports due to slump global market demand. The industry has witnessed decline
of around 11% YoY in the exports. The poor economic conditions in European
Union and Japan has resulted majorly in the decline of exports. Despite of
lower exports in the current fiscal year the trade deficit has reduced to
11-month low of 8.3% due to lower crude prices. The contraction in the demand
for non-oil merchandise is a bad indicator. There has been rise in the gold,
non-oil merchandise and non-gold imports and reduction in the exports of
non-oil merchandise will result in the reduction of trade surplus in the service
sector which rose from $ 6.3 billion to $7.6 billion in a year. Government of
India needs to introduce radical changes in the Union Budget and foreign trade
policy to support the export sector as the Indian exports have been hovering
around a figure of $ 300 billion since 2011-12.
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