Export contraction in May will be less than that in April: DGFT

Exports contraction in May is expected to be less than that seen April as exports to China have grown and imports from China have reduced in May.

Spice, fruits and vegetable exports have grown in May. About 70 percent of world exports happening in electronics telecom equipment, Directorate General of Foreign Trade (DGFT) said.

“70 percent of India’s exports address only traditional global exports. Average global Logistics cost is 7-8 percent. Logistics cost in India is 14 percent. We need to address the hidden cost associated with exports and ensure that no taxes are added to exports. Long and short term reforms needed in exports. Will look at targeted export incentives for identified sectors,” DGFT said.

DGFT also said it was looking at ensuring the availability of domestic steel for Indian export inputs at a reasonable price and would focus on district export plan for exports.

According to government data, India’s exports contracted by a record 60.28 percent to $10.36 billion in April amid the coronavirus lockdown. Imports too tumbled by 58.65 percent to $17.12 billion in April from $41.4 billion in the same month last year.

Major commodity groups which recorded negative export growth during April were gems and jewellery (-98.74 percent), leather (-93.28 percent), petroleum products (-66.22 percent) and engineering goods (-64.76 percent). Oil imports in April stood at $4.66 billion, which was 59.03 percent lower as compared to the same month last year.