The Federation of Indian Export Organisations (FIEO) on Tuesday urged the central government to check sharp decline in merchandise exports as it expressed concern over the widening trade deficit.
"The continuous negative growth in exports since December 2014 is a serious concern for all stakeholders, as the decline has exasperated to 20 percent till date this month," FIEO president S.C. Ralhan said in a statement here.
Holding low prices of crude, metal and commodity as the prime reason for declining exports, he said a whopping 59 percent plunge in petroleum exports resulted in overall export decline 12 percent, as the sector accounted for 20 percent of the country's exports.
"Decline in exports of engineering goods, gems and jewellery, organic and inorganic chemicals, drugs and pharmaceuticals, leather and leather products, electronic goods and plastics and linoleum are of equal concern as these sectors have either shown further dip or have moved into negative territory," Ralhan said.
Adding to the woes, the services sector had also declined in exports and imports by 5 percent and 20 percent in April of 2014-15 compared to the like period in 2013-14.
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"The interest subvention scheme should be re-introduced and liquidity crunch of exporters in the form of refunds be addressed with timely release of export benefits. We also need export development fund for aggressive marketing," Ralhan added.
According to the union commerce ministry, foreign trade (merchandise) declined 20.19 percent in dollar terms year-on-year while imports were also 16.52 percent lower in May.
Crude oil imports were also 40.97 percent down in value terms in May and 41.76 percent in April.
"Trade deficit for April-May this fiscal at $214 billion was higher than the deficit of $213 billion in like period of last fiscal," the ministry said in a statement.
