Highlighting India’s exports scenario, the head of Economic Advisory Council to the Prime Minister (EAC-PM) and Niti Aayog Member, Bibek Debroy has said that India’s net exports are not performing well even as the global economy is witnessing a decent recovery. He added that, India is facing a dilemma from the point of view of pushing exports, as exporters would like exchange rate to depreciate, however exchange rate might not depreciate as much as exporters want because of capital inflows. Debroy also noted that ideally the central bank should intervene in the market but intervention by the Reserve Bank of India (RBI) in the market is not without its cost side.
The exports witnessed lowest expansion in the last four months in February where it grew 4.5 per cent to 25.8 billion as shipments of engineering, textiles and gems and jewellery declined while trade deficit narrowed to a five-month low of $12 billion. The chairman of EAC-PM insisted as long as India’s import duties are below the bound rates, it can raise import duties. Moreover, some of India’s tariff rates are misaligned and the country has signed plethora of free trade agreements.
Noting that traditionally, Commerce Ministry and Ministry of External Affairs (MEA) have worked in silos, he said, “this is first time, they have started working together.” India’s trade prospects will depend on the efforts being made to improve logistics, integrate investments in the global supply-chain, improve the business environment and develop infrastructure, he added.
