Port Wings Editorial, June 24, 2015:
The latest data showing the sharp decline in trade for May 2015 has rattled the confidence of exporting community, which was pinning hope on new Foreign Trade Policy to help them out.
Though the Government of India and its Commerce Ministry yet to grasp the whole situation, which is developing day-by-day in the current financial year, experts started sending out the louder signals that the turbulence is ahead and be ready for eventualities.
When the new NDA government at the Centre led by Narendra Modi outlined its economic policy and even unveiled the new FTP in April, which was delayed by an year by the previous UPA government for want of perfect idea, the trade community was of the view that the phase of stagnation in the economy has gone and indeed a new dawn has descended on the country.
However, the latest figures have forced the trading community to change their view on the promises of the Modi-led Government on supporting the trade and the reverse phase could be attributed to the still existing confusion after the new FTP unveiled just two months ago.
During 2014-15, the economy has registered a growth rate of 7.4%, inflation is down to 5%, the current account deficit has fallen to within 1% of the GDP and the rupee has remained stable against the dollar.
The new government has laced with hopes that the business scenario would change after the change of guard in New Delhi.
However, to their dismay, nothing much changed and the trend has been on the reverse, putting enormous pressure on the Commerce Ministry to change its tactics to improve the confidence as well as the exports from the country, so that it can reach to a safer position on the positive trajectory in the current financial year.
Foreign Trade Policy, per se, recognises the global challenges faced by the export sector in the country and also identifies the potential sectors which could emerge as winners in the next five years. However, without a sound mechanism to analyse the turbulence well in time, for that case just in time, Government may falter on the track.
As a cascading effect, the turbulence in trade could hit the traders, which in turn, reflect on the overall performance of the country before the global benchmark.
So, the NDA government, which is busy nowadays with several other unimportant tasks in the political arena, needs to focus more on the economic front, as any jerk in trade could not only dent the country’s image abroad, but also impact the livelihood of lakhs of exporters.