Lok Sabha Question No. 159 (UNSTARRED), answered on 2016-04-25
Subject: Decline in Exports
Ministry: COMMERCE AND INDUSTRY
Asked by: SHIVKUMAR CHANABASAPPA UDASI, PRAHLAD SINGH PATEL, M. B. RAJESH, KIRTI (JHA) AZAD, SHARAD TRIPATHI, ARJUN RAM  MEGHWAL, K. GOPAL, C. N. JAYADEVAN, ASADUDDIN OWAISI, R. GOPALAKRISHNAN

## GOVERNMENT OF INDIA

## MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO.159 TO BE ANSWERED ON 25 th  APRIL, 2016

## DECLINE IN EXPORTS

## 159.  SHRI SHIVKUMAR UDASI:

SHRI PRAHLAD SINGH PATEL:

SHRI M.B. RAJESH:

SHRI KIRTI AZAD:

SHRI SHARAD TRIPATHI:

SHRI ARJUN MEGHWAL:

DR. K. GOPAL:

SHRI C.N. JAYADEVAN:

SHRI ASADUDDIN OWAISI:

SHRI R. GOPALAKRISHNAN:

Will the Minister of COMMERCE & INDUSTRY ( वािणÏय एवं उɮयोग मंत्री ) be pleased to state:

- (a) the quantum and value of export vis -a -vis export target fixed during each of the last three years, commodity/sector and country -wise;
- (b) ) whether there is a decline in the exports of major sectors during the said period resulting in increase in trade deficit;
- (c) if so, the details thereof along with the reasons therefor, sector -wise and its impact on country's economic growth;
- (d) the details of the problems/ challenges being faced by Indian exporters along with the steps taken by the Government to address them including the export incentive schemes announced by the Government for exporters; and
- (e) the measures taken by the Government to boost exports, reduce the trade deficit and achieve the export targets?

## ANSWER

वािणÏ य एवं उɮयोग राÏ य मंत्री ) Įीमती िनमर्ला सीतारमण ( ( èवतंत्र प्रभार )

THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY

(INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

- (a) The  commodity  and  country-wise  data  on  quantum  and  value  of  exports  of  the country  for  the  last  three  years  is  available  in  the  CDs  of  DGCI&S  publication 'Monthly Statistics of Foreign Trade of India' Vol. 1 (Exports) for March 2014, March 2015 and January 2016. These CDs are also regularly sent to Parliament Library by DGCI&S, Kolkata for reference.

Value of Exports data vis-à-vis export targets fixed during each of the last three years, are given as under:

Value: USD Billion

| Year    | Target fixed*   | Exports   |
|---------|-----------------|-----------|
| 2013-14 | 325             | 314.4     |
| 2014-15 | 340             | 310.3     |
| 2015-16 | No target fixed | 261.1@    |

*Source:DoC     @(Provisional)

- (b) and (c) The key sectors which recorded a major decline in exports are as under:

Value: USD Million

| COMMODITY                      | 2013-14   | 2014-15   | 2015-16 (April- February) (Provisional)   | Growth of 2015-16 (Apr-Feb)/w.r.t 2014- 15(Apr-Feb)   |
|--------------------------------|-----------|-----------|-------------------------------------------|-------------------------------------------------------|
| PETROLEUM CRUDE &PRODUCTS      | 63,177.46 | 56,794.15 | 28,140.91                                 | - 48.03                                               |
| SHIP, BOAT AND FLOATING STRUCT | 3,724.76  | 5,352.61  | 2,807.90                                  | - 44.94                                               |
| AIRCRAFT, SPACECRAFT AND PARTS | 4,584.87  | 6,159.19  | 3,570.61                                  | - 38.9                                                |
| IRON AND STEEL                 | 9,223.40  | 8,684.40  | 5,154.20                                  | - 35.67                                               |
| RICE(OTHER THAN BASMOTI)       | 2,925.05  | 3,336.84  | 2,081.72                                  | - 32.53                                               |
| COPPER AND PRDCTS MADE OF COPR | 2,855.01  | 3,420.30  | 2,313.64                                  | - 26.61                                               |
| RICE -BASMOTI                  | 4,864.69  | 4,516.28  | 3,221.54                                  | - 21.71                                               |
| GOLD AND OTH PRECS METL JWLERY | 10,857.70 | 13,242.41 | 9,930.37                                  | - 18.6                                                |
| PRODUCTS OF IRON AND STEEL     | 6,780.18  | 7,562.81  | 5,644.30                                  | - 18.21                                               |
| IC ENGINES AND PARTS           | 1,770.30  | 2,397.98  | 1,830.60                                  | - 16.39                                               |
| BUFFALO MEAT                   | 4,350.23  | 4,781.18  | 3,747.04                                  | - 15.04                                               |
| MARINE PRODUCTS                | 5,016.46  | 5,510.49  | 4,408.14                                  | - 14.17                                               |
| MANMADE YARN,FABRICS,MADEUPS   | 5,183.47  | 5,275.03  | 4,292.01                                  | - 11.67                                               |
| PEARL, PRECS, SEMIPRECS STONES | 27,159.49 | 24,758.79 | 20,424.45                                 | - 10.46                                               |
| ORGANIC CHEMICALS              | 5,641.15  | 5,394.35  | 4,421.27                                  | - 10                                                  |

Source:DGCI&S

The trade deficit in recent period has been as follows:

Value: USD Billion

| Period   |   Exports |   Imports |   Trade Deficit |
|----------|-----------|-----------|-----------------|
| 2013-14  |    314.41 |    450.2  |         -135.79 |
| 2014-15  |    310.34 |    448.03 |         -137.69 |

| 2015-16 (Provisional)   | 261.14   | 379.60   | -118.46   |
|-------------------------|----------|----------|-----------|

Source:DGCI&S

Some key  reasons for negative export growth in the recent period are as follows:

- (i) Fall  in  global  demand  and  fall  in  commodity  prices  impacting  terms  of trade for commodity exporters.
- (ii) Fall in the prices of petroleum crude resulting in consequent decline in prices as well as export realizations for petroleum products, which are major items of export for India.
- (iii) EU  Countries  that  account  for  nearly  16%  of  India's  export,  are  facing stagnation.  China is also experiencing a slow down. The recovery in US has been moderate and uncertain in terms of sustainability.
- (iv) There is a general slowdown in the world GDP growth and hence in growth of World Trade. Some increase in trade barriers has also been reported.

(d) and (e)  Steps have been taken to address the trade deficit through promotion of  exports,  as  described  below.  Efforts  are  also  made  to  address  country  specific impediments through bilateral trade engagements. Details of some key steps taken by Government to boost exports and reverse the current trend in foreign trade are as follows:-

- i) The  Merchandise  Exports    from  India    Scheme    (MEIS)    was    introduced    in      the Foreign Trade Policy (FTP) 2015-20 on April 1, 2015.MEIS aims to incentivize  export of merchandise  which are produced/manufactured in India. At the time of introduction of  MEIS  on  April  1,  2015,  the  scheme  covered  4914  tariff  lines  at  8  digit  level. Countries  of  the  globe  were  grouped  into  3  market  categories  (Country  Group  A, Country  Group  B  &  Country  Group  C)  for  grant  of  incentives  under  MEIS.  Slight changes in lines covered etc. were made on 14.07.2015 and 15.7.2015. Thereafter on 29.10.2015, 110 new Tariff Lines at 8 digit level were added under the scheme. The rates/country coverage for 2228 lines at 8 digit level were enhanced. As on date, 5012 Tariff Lines at 8 digit level are eligible for rewards under MEIS. The annual resource allocation  under  MEIS  was  enhanced  from  Rs.  18000  crore  to  Rs.  21000  crore  in October 2015.
2. ii) The  Government  has  introduced  the  Interest  Equalisation  Scheme  on  Pre  &  Post Shipment Rupee Export Credit with effect from 1.4.2015. The scheme is available to all exports under 416 tariff lines [at ITC (HS) code of 4 digit] and exports made by Micro, Small & Medium Enterprises (MSMEs) across all ITC (HS) codes. The rate of interest equalisation is 3% per annum.
3. iii) In addition the Government continues to provide the facility of access to duty free raw  materials  and  capital  goods  for  exports  through  schemes  like  Advance Authorisation, Duty Free Import Authorisation (DFIA), Export Promotion Capital Goods (EPCG) and Drawback/Refund of Duties.

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