Exporters have called for policy measures including interest rate cuts to push growth as exports declined in May reflecting weakness in global recovery.
With the sharp rupee depreciation not giving them commensurate benefits and the Government focusing on checking gold and crude oil imports to contain trade deficit, exporters say that policy makers should not ignore their cause.
“The status quo in RBI mid quarter Monetary Policy Review for June has not enthused exporters who are plagued by high cost of credit,” said FIEO President Rafeeque Ahmed.
Exporters say that growth should be given precedence over inflation as growth alone can keep the economy on track, especially when recovery in global economy was weak.
The sharp depreciation in the value of the rupee against the dollar in the past months has not helped exporters much as global demand is low and other currencies are also depreciating, Ahmed said.
While the economies of the US and Japan have shown some improvement, the Euro Zone continues to be a cause of concern.
“Demand is also low from other important trade partners like China, Brazil, Russia and South Africa,” Ahmed said stressing on the need for policy measures.
AEPC Chairman A. Sakthivel said that despite overall global slowdown, garment exports have increased due to better compliance practices adopted by factories that have resulted in big international chain stores sourcing from India.
The Government needs to continue pushing exports as the country’s rising trade deficit, which in turn widens the current account deficit, is a cause for worry.
While the Government is struggling to contain gold imports which increased 89.7 per cent in May to $8.3 billion, import of crude oil increased three per cent during the month to $15 billion.