The Commerce Ministry has asked the Finance Ministry to rationalise taxes on exports and extend the interest subvention scheme to support the export industry, which has been witnessing a continuous fall in export demand through this calendar year.
Speaking on the sidelines of a packaging industry event here, Rajni Ranjan Rashmi, Additional Secretary, Ministry of Commerce and Industry, said, “The relative fall in the export numbers is because of several reasons, one the global slowdown and also the fall in commodity prices. All this reflects in our numbers. However, the larger impact of the fall in export revenue has been curtailed because of lower costs on oil imports.”
According to data released by the Ministry, exports contracted 20.7 per cent to $21.2 billion and imports shrank 9.95 per cent to $33.7 billion during August, leaving a trade deficit of $12.5 billion.
August saw the ninth continuous month-on-month fall in Indian exports. “Hopefully,” Rashmi added, “with the fiscal and financial arrangements in place, we will see better days.”
Speaking on the Trans-Pacific Partnership (TPP), a mega regional trade agreement led by the US to which India is not a party, Rashmi said, “The TPP is an important development. It represents a conflict between multi- and bi-laterialism. Regional trading arrangements do not contribute to the multilateral trading regime but at the same time do help some partners in creating a trade regime with positive and negative consequential effects.”
“If the TPP emerges as major trade bloc, We need to see if this trade bloc will affect our competitiveness in the service industry.
“However,” Rashmi concluded, “investment works on several other factors as well, like market potential, the strength of a market, and not just on a trade agreement. So the potential for growth in investment in India remains.”