Lok Sabha Question No. 154 (UNSTARRED), answered on 2015-11-30
Subject: Decline in Exports
Ministry: COMMERCE AND INDUSTRY
Asked by: VINAYAK BHAURAO RAUT, JOSE K. MANI, MAHEISH GIRRI, JYOTIRADITYA MADHAVRAO SCINDIA, GOPAL CHINAYYA SHETTY, R. VANAROJA, MALLIKARJUN  KHARGE, RAVNEET SINGH, R.K. BHARATHI MOHAN, RAHUL RAMESH SHEWALE, PONGULETI SRINIVASA REDDY, A.T. (NANA) PATIL, R. GOPALAKRISHNAN, SHRIKANT EKNATH SHINDE

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

## LOK SABHA UNSTARRED QUESTION NO. 154

## TO BE ANSWERED ON 30 TH  NOVEMBER, 2015

## DECLINE IN EXPORTS

## 154. SHRI VINAYAK BHAURAO RAUT:

SHRI JOSE K. MANI:

SHRI MAHEISH GIRRI:

SHRI JYOTIRADITYA M. SCINDIA:

SHRI GOPAL SHETTY:

SHRIMATI VANAROJA R:

SHRI MALLIKARJUN KHARGE:

SHRI RAVNEET SINGH:

SHRI BHARATHI MOHAN R.K.:

SHRI RAHUL SHEWALE:

SHRI PONGULETI SRINIVASA REDDY:

SHRI A.T. NANA PATIL:

SHRI R. GOPALAKRISHNAN:

DR. SHRIKANT EKNATH SHINDE:

Will the Minister of COMMERCE & INDUSTRY ( वाणिज्य एवं उद्योग 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 and the current year, 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 employment generation:
- d) the details of the problems/ challenges being faced by Indian exporters and the steps taken by the Government to address them; and
- e) the measures taken to boost exports and explore new markets, minimize the impact of the trade deficit and achieve the export targets?

## ANSWER

वाणिज् य एवं उद्योग राज् य मंत्री )णीमीी स मलमा नीीारमि((स्वींत्र प्रभार )

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

(a,b&c) The export target fixed during each of  the last three years along with value of exports and trade deficit is given in the table below.

## Value (US$ Billion)

|               |   2012-13 |   2013-14 |   2014-15 | 2015-16   | (April-October)*   |
|---------------|-----------|-----------|-----------|-----------|--------------------|
| Export Target |     350   |     325   |     340   | ………       |                    |
| Export        |     300.4 |     314.4 |     310.3 |           | 154.3              |
| Trade deficit |     190.3 |     135.8 |     137.7 |           | 77.8               |

*Provisional

Quantum and the value of exports 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). Such CD's are regularly sent to Parliament Library by DGCI&S, Kolkata.

In  value terms, the merchandise trade deficit has decreased from US$ 86.27 Billion in Apr-Oct 2014 to US$ 77.76 Billion for the same period in 2015. The major sectors which are  showing fall  are  PETROLEUM PRODUCTS, TELECOM INSTRUMENTS , PLASTIC RAW MATERIALS,ORGANIC  CHEMICALS,  BULK  MINERALS  AND  ORES  SILVER,  INORGANIC CHEMICALS,CONSUMER  ELECTRONICS  ,PULSES,PROJECT  GOODS  FRESH  FRUITS,DYE INTERMEDIATES,RAILWY TRNSPRT EQUIPMNTS, PRTS OTHER CRUDE MINERALS,SURGICALS,TIN AND PRODUCTS MADE OF TIN, BOOKS, PUBLICATIONS AND PRNTNG.

The main reasons for the fall in exports are,

(i) The major global slowdown during 2014 and 2015 which  has impacted Global Trade and India's Trade adversely. (ii) World Economic Outlook forecasts for import  has  been revised specially from emerging markets and developing economies from 3.5% to 1.3% for  the  year  2015.(iii)Moderate  but  uncertain  recovery  in  the  US  Economy.(iv)  The significant  slowdown  includes  the  Chinese  Economy  (v)  Sharp  fall  in  Crude  and Petroleum product prices,(Brent crude declining from about USD 98 per barrel last year to  USD  47.57  at  present).(vi)  fall  in  other  commodity prices  (Gold  prices  fell  by  7.2  % high grade copper by about 26% in last one year (vii) Currency Fluctuations

According to Ministry of Labour & Employment Quarterly Survey, in comparison to Dec 2013 the employment in 2014  has increased by 196000 in exporting units. There is an increase in all other sectors except in leather and handloom/power loom exporting units where employment has come down by 7000 and 4000 respectively.

( d & e ) The steps taken by Government to address the challenges faced by exporters are:

- (i) New Foreign Trade Policy (2015-20)  launched on 1 st April,  2015  with  a  focus  on  supporting  both manufacturing and services exports and improving the 'Ease of Doing Business'.    The policy 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.
- (ii) By  way  of  trade  facilitation  and  enhancing  the  ease  of  doing  business,  Government  reduced  the number  of  mandatory  documents  required  for  exports  and  imports  to  three  each,  which  is comparable  with  international  benchmarks.  The  trade  community  can  file  applications  online  for various trade related schemes.  Online payment of application fees through Credit/Debit Cards and electronic fund transfer from 53 Banks has been put in place.
- (iii) The Government has also expanded the coverage of Merchandise Exports from India scheme on 29 th October,  2015  by  adding  110  new  items  to  the  original  4914  lines  included  in  the  scheme.    The reward rates/country coverage of 2228 items were enhanced.  Consequently the envisaged revenue outgo  under  the  scheme  was  increased  from  Rs.  18,000/-  crore  earlier  to  Rs.  21,000/-  crore  per annum.
- (iv) Government has infused additional Corpus (Capital) to the tune of Rs. 375/- crore into the National Export  Insurance  Account  (NEIA),  raising  the  corpus  to  over  Rs.  2,100/-  crore,  and  strengthen  the capacity to augment Project exports from the country.  The equity capital of ECGC Ltd.  has also been raised by Rs. 50 crore to Rs. 1,300 crore enabling higher underwriting capacity to support exporters to expand their business and support banks for adequate lending to exporters.
- (v) Recently,  the  government  has  approved  the  proposal  for  implementing  the  Interest  Equalization Scheme on Pre & Post shipment Rupee Export Credit w.e.f. 1 st April, 2015 for 5 years, incorporating an interest equalization element of 3% per annum.  This scheme will facilitate  access to export credit at competitive rate of interest, given the lower interest rate level prevailing for exporters in other countries.
- (vi) 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, and address other issues relating to various clearances etc. and build capacity of new exporters, in order to promote exports.

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