The order book position of exporters are healthy and exports growth trend is set to continue, reveals a study by the Federation of Indian Export Organisations (FIEO).

The federation noted that India has started on a healthy note in 2021 and exports have so far seemed encouraging.

It added that the growth story will continue to be a mixed one as outbound shipments of both value added goods and raw material will continue to boost the overall exports of the country,

“Since the order book position of exporters is extremely good, we expect that the trend will continue, may be with occasional ups and downs due to the second or third wave of pandemic. However, the growth story will continue to be a mixed one as both value added exports and raw material exports will contribute to our export basket,” said the FIEO.

The country’s merchandise exports in May 2021 was USD 32.21 billion, which recorded a rise of 67.39 per cent over USD 19.24 billion in May 2020 and 7.93 per cent over USD 29.85 billion in May 2019.

With respect to India’s export growth in food and agriculture sectors, FIEO study revealed a positive outlook despite logistics challenges and unprecedented surge in freight rates and further stated that many of the products including processed ones have exhibited encouraging trend in 2020.

At the same time, it added that the buoyancy in agriculture commodities also facilitated India’s agriculture exports.

“We need to build the momentum particularly as China’s image has taken a dent subsequent to the pandemic and many countries are reluctant to imports from China particularly the edible products,” it added.

Export of metals

The federation also shared that the country fared well in the exports of metals during 2020. It noted that raw material exports have, however, been a “double-edged sword”.

FEIO stated that while such exports do add to the export numbers and also generate economic activity, they also put pressure on logistics and deprive the country of value-added exports.

While underlining the important role that the authorities have to play, the federation revealed that there have been cases where the same raw material has been exported from the country and then imported back, thereby exerting pressure on logistics in addition to incurring avoidable freight charges. It highlighted how the government has to play an extremely delicate role to maintain an equilibrium between the varying interests of the two.