Product basket diversification needed to boost exports: FIEO

Posted by Daily Shipping Times on 17-03-2017        Tweet

NEW DELHI: At a time when developed economies are adopting protectionist measures to insulate themselves from global economic uncertainties, exporters need to diversify their product basket to remain competitive, FIEO has said.

"We have to diversify our product basket to tap new markets and boost exports. We have requested the Commerce Ministry to work on this aspect. Major trade is happening in goods like hi-technology items," Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said recently.

He added that the order books of exporters are "better but not encouraging". India's main export items include textiles, gems and jewellery but globally, the trade of these goods are not much, he said.

Diversification of product basket is also important to increase share of India's global trade, Sahai said.

Other major items which the Country exports include engineering products, petroleum goods and pharmaceuticals.

According to a report, in the top 100 import items of the world in 2010, India has only 15 items with a share of 2 per cent and above.

India's exports rose 4.32 per cent in January to USD 22.11 billion mainly due to increase in shipments of petroleum products, engineering goods and iron ore even as trade deficit widened to USD 9.84 billion.

Going by this trend, this financial year, exports will reach close to USD 270 billion, according to FIEO.

On the impending introduction of Goods and Services Tax (GST), Sahai said it could create liquidity problem for exporters. Exporters have demanded that the GST Council should keep exports out of the GST framework and levy lower taxes on labour-intensive sectors like leather and plantation.

They have also asked for ab initio (from the beginning) exemption from paying taxes under the new indirect tax regime arguing that delay in refunds often run into months resulting in blocked working capital.