Lok Sabha Question No. 62 (STARRED), answered on 2015-07-24
Subject: Decline in Exports
Ministry: COMMERCE AND INDUSTRY
Asked by: LALLU SINGH, OM PRAKASH YADAV

**GOVERNMENT OF INDIA**

MINISTRY OF COMMERCE & INDUSTRY

(DEPARTMENT OF COMMERCE)

## LOK SABHA

**STARRED QUESTION NO. 62**

**TO BE ANSWERED ON 24** **TH** **JULY 2015**

**DECLINE IN EXPORTS**

***62(H). SHRI LALLU SINGH:**

**SHRI OM PRAKASH YADAV:**

Will the Minister of **COMMERCE & INDUSTRY (´ÉÉÉÊhÉVªÉ A´ÉÆ =tÉÉäMÉ àÉÆjÉÉÒ)** be pleased to state:

- 1.1. the quantum and value of export and import vis-a-vis export target fixed during each of the last three years and the current year, country and commodity/sector-wise along with the country's share in world's trade including share of various States therein;
- 1.2. whether India's exports are continuously on the decline during the last few years, particularly for six months in a row resulting in increase in trade deficit and if so, the details thereof indicating the sectors which have shown negative growth during the said period along with the reasons therefor;
- 1.3. whether the share/contribution of the various export sectors in the Gross Domestic Product (GDP) is on the rise despite increase in trade deficit during the said period and if so, the details thereof indicating the contribution of export sectors in GDP;
- 1.4. whether the Government proposes to diversify the export sectors/destinations and review the ongoing export promotion schemes being implemented and if so, the details thereof; and
- 1.5. the further measures taken to boost exports, minimize the impact of the trade deficit, achieve the export target and grant the incentives/facilities/tax concessions to the exporters to meet international challenges in this regard?

### ANSWER

**okf.kT; ,oa m|ksx jkT; ea=h  )Lora= izHkkj)** ( **Jherh fueZyk lhrkje.k** )

THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

1. to  e): A Statement is laid on the Table of the House.

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**STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA STARRED QUESTION NO. 62 FOR ANSWER ON 24** **TH** JULY, 2015 REGARDING “DECLINE IN EXPORTS”

1. The value of Exports, Imports, along with Export Target, Trade Deficit and share of exports in the Gross Domestic Product during the last three years and current year is given in the following Table:
| Value (US $ Billion)   | Value (US $ Billion)   | Value (US $ Billion)   | Value (US $ Billion)   | Value (US $ Billion)   |                      |
|------------------------|------------------------|------------------------|------------------------|------------------------|----------------------|
|                        | Exports                | Exports                | Imports                | Trade     deficit      | Exports as % of GDP* |
| Year                   | Target                 | Exports                | Imports                | Trade     deficit      | Exports as % of GDP* |
| 2012-13                | 350                    | 300.4                  | 490.7                  | 190.3                  | 16.7                 |
| 2013-14                | 325                    | 314.4                  | 450.2                  | 135.8                  | 17.0                 |
| 2014-15                | 340                    | 310.5                  | 447.6                  | 137.1                  | 15.4                 |
| 2015-16 April-June)    | -                      | 66.7                   | 98.9                   | 32.2                   |                      |

*Source: DGCI&S* * *Source- Ministry of Finance*

The quantum and value of exports and imports country, commodity/sector-wise are available in the DGCI&S publication in CD form namely ‘Monthly Statistics of Foreign Trade of India’ Vol. I (Exports) and Vol.II (Imports). Such CD’s are regularly sent to Parliament Library by DGCI&S, Kolkata.

India’s share in World Trade as per WTO is  2.12 %, 2.07 %, 2.05 % and 2.06 %  during the calendar year 2012, 2013 2014 and 2015 ( Jan- Mar).

State wise exports and their percentage share in India’s total export are given in **Annexure I.**

1. India’s exports as well as trade deficit have shown a mixed trend during the last three years as evident from table above. There has been decline in exports during the past six months as compared to exports of corresponding months of previous year. Month-wise exports figures are given in the table below.

(US$ Billion)

| **Month**                                  | **2013-14**   | **2014-15**   | **% Growth 2014-15 over 2013-14**   | **2014-15**   | **2015-16 (P)**   | **% Growth 2015-16 over 2014-15**  **2015-16 over 2014-15**   |
|--------------------------------------------|---------------|---------------|-------------------------------------|---------------|-------------------|---------------------------------------------------------------|
| January                                    | 26.9          | 23.9          | (-)11.2                             |               |                   |                                                               |
| February                                   | 25.4          | 21.5          | (-)15.4                             |               |                   |                                                               |
| March                                      | 30.3          | 23.9          | (-)21.1                             |               |                   |                                                               |
| April                                      |               |               |                                     | 25.6          | 22.0              | (-)14.1                                                       |
| May                                        |               |               |                                     | 28            | 22.4              | (-)20.0                                                       |
| June                                       |               |               |                                     | 26.5          | 22.3              | (-)15.8                                                       |
| **Source: DGCI&S    (P): Provisional** |               |               |                                     |               |                   |                                                               |

The main commodity/sectors that have shown continuous negative growth are: Petroleum Products, Gold, Pearls Precious/Semi-Precious Stones, Iron and Steel, Cotton raw including waste, Organic Chemicals, Rice-Basmati, Cotton Yarn, Plastic Raw Materials, are reflecting a sharp fall from March 2015 to May 2015.

The main reasons for the decline in exports during the period are as under:

1. Fall in global demand and fall in commodity prices, impacting terms of trade for commodity exporters.
2. Fall in the prices of petroleum crude resulting in consequent decline in prices as well as export realizations for petroleum products, which are major product items of exports for India.
3. EU Countries that account for nearly 16% of India's exports, are facing problems of stagnation and deflation. The appreciation of the rupee against the euro has adversely impacted India's exports to EU countries.
4. Fall in demand of precious goods like Pearls, Precious and Semi-precious Stones, especially from Oil Producing Countries.
|    |    |
|----|----|

(c)	The share of merchandise exports in GDP was 16.7% in 2012-13,  17.0% in 2013-14 and 15.4% in 2014-15.  Trade deficit as a percentage of GDP has declined from 10.7% in 2012-13 to 7.9% in 2013-14 and 7.0% in 2014-15.

(d) & (e) The Government has taken various measures to restore the positive growth rate in exports, which inter-alia include the following:

1. The Foreign Trade Policy (FTP) 2015-20, released on 1st April, 2015, has introduced two new schemes, namely, ‘Merchandise Exports from India Scheme’(MEIS) for incentivising export of specified goods to specified markets and ‘Service Exports from India Scheme’ (SEIS) for increasing exports of notified services from India.  This will diversify India’s export markets and products and give a boost to India’s exports.

1. The Foreign Trade Policy 2015-20 has also introduced several measures for facilitating trade and improving `Ease of doing business’ by reducing the number of mandatory documents required for export and import to three each. In order to facilitate faster processing and enable working in 24*7 mode, DGFT has facilitated submission of various applications and documents in online mode, as well as online payment of application fees through credit/debit cards and electronic fund transfer from 53 banks. DGFT has also recently launched a mobile application (android based) for facilitating trade. CBEC has facilitated integration of Plant Quarantine and FSSAI with EDI system of Customs for purposes of export and import. SEZ Online system has also been integrated with Custom's EDI system. These measures will facilitate trade by reducing transaction cost and time.

1. In order to provide Indian exporters better access to various markets, the government is engaged in regional, bilateral and multilateral trade negotiations with various countries and trade blocks.

1. The State governments have been requested to develop their export strategy, appoint export commissioners, address infrastructure constraints restricting movement of goods, facilitate refund of VAT/Octroi/State level cess, address other issues relating to various clearances etc. and build capacity of new exporters, in order to promote exports.

1. The government continuously monitors the export performance of different sectors to different countries and takes need based measures from time to time, keeping in view the emerging global financial situation and overall economic implications.

**ANNEXURE - I**

| **STATE NAME**       | **2014-15  (Values in Rs. Crore)***   |   **% share to total export of 2014-15*** |
|----------------------|---------------------------------------|-------------------------------------------|
| ANDAMAN & NICOBAR    | 46.28                                 |                                         0 |
| ANDHRA PRADESH       | 97162.41                              |                                      5.12 |
| ARUNACHAL PRADESH    | 39.11                                 |                                         0 |
| ASSAM                | 2089.15                               |                                      0.11 |
| BIHAR                | 6310.93                               |                                      0.33 |
| CHANDIGARH           | 587.13                                |                                      0.03 |
| CHATTISGARH          | 7230.06                               |                                      0.38 |
| DADRA & NAGAR HAVELI | 10684.77                              |                                      0.56 |
| DAMAN & DIU          | 3960.65                               |                                      0.21 |
| DELHI                | 61273.79                              |                                      3.23 |
| GOA                  | 9784.85                               |                                      0.52 |
| GUJARAT              | 364313.56                             |                                      19.2 |
| HARYANA              | 69061.76                              |                                      3.64 |
| HIMACHAL PRADESH     | 5486.94                               |                                      0.29 |
| JAMMU & KASHMIR      | 939.63                                |                                      0.05 |
| JHARKHAND            | 3358.41                               |                                      0.18 |
| KARNATAKA            | 144410.59                             |                                      7.61 |
| KERALA               | 25440.53                              |                                      1.34 |
| LAKSHADWEEP          | 2.76                                  |                                         0 |
| MADHYA PRADESH       | 25301.01                              |                                      1.33 |
| MAHARASHTRA          | 445349.65                             |                                     23.47 |
| MANIPUR              | 1.17                                  |                                         0 |
| MEGHALAYA            | 523.98                                |                                      0.03 |
| MIZORAM              | 1.71                                  |                                         0 |
| NAGALAND             | 10                                    |                                         0 |
| ORISSA               | 20460.88                              |                                      1.08 |
| PONDICHERRY          | 2076.02                               |                                      0.11 |
| PUNJAB               | 41425.7                               |                                      2.18 |
| RAJASTHAN            | 37250.97                              |                                      1.96 |
| SIKKIM               | 23.69                                 |                                         0 |
| TAMIL NADU           | 168001.34                             |                                      8.85 |
| TRIPURA              | 35.77                                 |                                         0 |
| UTTAR PRADESH        | 85034.43                              |                                      4.48 |
| UTTARANCHAL          | 8509.48                               |                                      0.45 |
| WEST BENGAL          | 55884.87                              |                                      2.94 |
| TELENGANA            | 13431.63                              |                                      0.71 |
| UNSPECIFIED          | 182336.26                             |                                      9.61 |
| **TOTAL**            | **1897841.87**                        |                                       100 |

* Note: State wise Export data provided in the Table above is subject to following limitations:

1. Figures compiled by DGCI&S are as reported by Customs, without any validation.
2. There is provision for entry of only one State of Origin code in the Shipping Bill. There is no provision at present for making entries in case of shipping bills with multiple invoices, containing items originating from more than one State.
3. In the Daily Trade Returns (DTRs) non-reporting of State of Origin Code is considerable.
4. DGCI&S interaction with exporters to check the validity of the State of Origin code revealed that

(i) Exporters have a tendency to report the State to which they belong or the State in which the port (through which the export has taken place) belongs or the State from where they ‘procured’ the goods as the State of Origin for that particular goods instead of the actual origin of the goods.

(ii) The problem is acute in case of non-manufacturing exporters (who only have idea about the place of procurement not production of the goods).

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