The Federation of Indian Export Organisations has said that free trade agreements and comprehensive economic partnership agreements have facilitated more imports than exports from India. Exports to several countries with which India has signed FTA have shown a decline.
“We need to revisit strategies with countries where FTA/CEPA has been signed. One reason for lacklustre performance of Indian exports is the slow penetration in the markets where we have signed CEPA or FTA in the last few years,” M. Rafeeque Ahmed, President, FIEO, told reporters here.
India’s exports to ASEAN went down to $14.66 billion in the first six months of the financial year compared with $36.74 billion in the same period of 2011-12. During the April-September period, exports to Singapore, Japan, Korea, Malaysia and Thailand stood at $ 6.6 billion, $2.6 billion, $1.9 billion, $1.7 billion and $ 1.5 billion, respectively.
FIEO chief said that exports to countries such as Singapore, Japan and Korea was much less in 2012 compared with the corresponding period a year ago. On the contrary, he said, imports from these countries showed encouraging trends.
Lack of awareness
The FIEO chief said lack of awareness among the exporters, mostly from the small-scale sector, is one of the reasons for non-accrual of the benefits from the FTAs. “The idea of FTAs is to boost exports by taking advantage of tariff concessions. Exports to all those countries, with which we have free trade pacts, have not picked up,” he said.
Ahmed said such countries and region should be put under the Focus Market Scheme to dovetail exports. On its part, FIEO said it is bringing out a comprehensive book which will list commodity-wise reduced tariffs from each country to help exporters penetrate into these markets. Worried over sliding export growth, the apex body of exporters also said the Government must advise banks to provide adequate credit to exporters. “Whenever there is a decline in exports, banks ask their credit department to go slow on credits. Just like the agriculture sector, banks also need a fixed credit scheme for exporters,” India’s exports in November shrunk 4.17 per cent year-on-year, for the seventh month in a row, to $22.2 billion. Exports in November, 2011 stood at $23.2 billion. Imports grew 6.35 per cent to $41.5 billion in November, leaving a trade deficit of $19.28 billion.
During April-October 2012-13, the country’s shipments shrunk 5.95 per cent to $189.2 billion. Imports during the period dipped 1.58 per cent to $ 318.7 billion.