Federation of Indian Export Organisations (FIEO) said that India has started on a good note in 2021 and exports figures so far have been encouraging.
“Since the order book position of exporters is extremely good, we expect that the trend will continue, may be with occasional ups and downs due to the second or third wave of pandemic. However, the growth story will continue to be a mixed one as both value added exports and raw material exports will contribute to our export basket,” it added.
India’s merchandise exports in May 2021 stood at $32.21 billion, an increase of 67.39 per cent over $19.24 billion in May 2020 and 7.93 per cent over $29.85 billion in May 2019.
Further it said that India’s export growth in food and agriculture sectors has been remarkable and many of the products including processed ones have shown encouraging trend in 2020 despite logistics challenges and extraordinary hike in freight rates.
At the same time, it said, the buoyancy in agriculture commodities also helped India’s agriculture exports. “We need to build the momentum particularly as China’s image has taken a dent subsequent to the pandemic and many countries are reluctant to imports from China particularly the edible products,” the federation said.
Similarly, India has done well in exports of metals during 2020.
“However, raw material exports have been a double-edge sword. While such exports do add to our export numbers and also generate economic activity, they also put pressure on logistics and deprive the country of value-added exports,” the study said.
It added that the government has to play an extremely delicate role to strike a balance between the varying interests of the two.
There have been cases where the same raw material has been exported from the country and then imported back, putting pressure on logistics besides remitting avoidable freight charges, it said.
“A logical solution could be to attract investment into the value added segment so that the raw-material is processed in the country and only intermediate or the final product so manufactured is exported,” it said.
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