New Delhi, July 17 (IANS) In view of the continuous decline in exports over a half-year period, the government on Friday said it will soon announce an interest subsidy scheme to aid exporters.
“The interest subvention scheme is to be announced soon, that will give encouragement to sectors that have high potential,” Commerce Minister Nirmala Sitharaman said at an event here.
“So, the triggers for improving the export performance are not really happening,” she said, referring to low international demand and depreciating currencies, particularly the euro.
Under the interest subvention scheme, which ended on March 31 last year, exporters got loans at subsidised rates.
India’s merchandise exports declined further for the seventh straight month in June to $22.29 billion, which was 15.82 percent lower than the $26.48 billion worth shipped in the like month of last year, official data showed on Wednesday.
According to the data furnished by the commerce and industry ministry, imports during the month under review fell by 13.40 percent at $33.12 billion.
Exports remained almost static compared to May’s figure of $22.34 billion, continuing the declining trend for the sixth straight month, caused by the global economic slowdown, fall in crude oil prices and appreciation of the rupee.
Cumulative exports for the period April-June 2015-16 at $66.69 billion registered a 16.75 percent decline over that in the corresponding quarter ($80.11 billion).
Earlier this month, the Federation of Indian Export Organisations (FIEO) warned that the continuing decline in exports would result in layoffs, besides putting pressure on the current account deficit (CAD).
FIEO president S.C. Ralhan also agreed with Reserve Bank of India Governor Raghuram Rajan’s recent remarks that the central banks globally were at risk of slipping into the kind of beggar-thy-neighbour strategies, leading to the Great Depression of the 1930s again.
In a statement, he said that based on the current order booking position, he was apprehensive that the Indian exports might significantly decline in volume in the months ahead, resulting in job layoffs.
The strategy of “making a beggar out of neighbouring nations” normally involves increasing the demand for one’s exports by devaluing the nation’s currency so as to make the exports to other countries cheaper.
India posted exports of $310.5 billion in 2014-15, that fell short of the fiscal’s export target of $340 billion.