The Director General of Foreign Trade (DGFT) has confirmed that July exports continue to be in the decline and the export outlook looks bleak. Commerce and Industry Minister Anand Sharma says the government is mulling a stimulus package for exports sector, He said we will announce more stimulus in the trade policy this month."

According to him, the ministry is taking steps to combat the current global scenario.

Sharma sees marginal growth in export demand and says the capital goods industry is witnessing revival.

This was the Board of Trade meeting—the highest decision-making body advising the Commerce Minister on the way to go for Indian exports and imports. This was a significant meeting coming as it does ahead of the foreign trade policy. Sharma, making it clear that he would want to enunciate a long-term vision for the Indian exports and imports or Indian foreign trade sector spanning till 2014.

Of course he has to be fully alive at the same time about the short-term global dynamics as they are but beyond a point, there is a realisation sinking in that with the western economies of the US and Europe still in recession and Indian exports heavily skewed towards those economies, there is precious little that the Indian government can do to prop up exports.

It can and it will perhaps, through the Foreign Trade Policy ensure that as far as the incentives are concerned, Indian exports are not a disadvantage vis-à-vis their other counterparts but beyond that, it cannot really help in propping up demand overseas. Unfortunately, even with three stimulus packages, there is this recession, which is ensuring that Indian exports still are on the decline—the DGFT confirming that July exports will perhaps continue to be in the same ways vein as June exports and will be on the declines.

So the realisation has set in that it really depends on the turnaround of western economies. And, that, beyond a point, the government cannot do much to help exporters.

source: MC