Dry Run

Despite government initiatives, India’s exports have remained below the 2013/14 levels. Exporters' GST problems and rising trade barriers suggest fast growth is unlikely to materialise.

- Joe C. Mathew

SUNIL HARJAI, A NOIDA-BASED leather footwear exporter, is worried. His value-added tax refunds worth ₹1.75 crore have been pending with the tax department for five years. Increased competition in the global market and supply disruptions caused by Goods and Services Tax (GST) last year and demonetisation the year before have hit his business. The turnover of his company, Siddharth Exports, has fallen from ₹35 crore to ₹20 crore. He fears he may have to rationalise his 400-strong workforce soon. “It’s getting worse. A lot of things happening around us are increasing the feeling of negativity among exporters. To make matters worse, other countries are growing and taking our business,” says Harjai, who is also the convener of the footwear panel of the Council of Leather Exports in India.

Leather and leather-product exports are among the various labour intensive sectors facing a slowdown. Monthly foreign trade numbers given by the commerce ministry show that apparel exports for April 2018 were 22.76 per cent lower than in the same month of the previous year. Apparel production declined for 11 straight months up to March. “Continued backlog in GST and release of rebate on state levies are affecting sentiment,” says H.K.L. Magu, Chairman, Apparel Export Promotion Council.

Foreign trade data for May shows while exports rose 20 per cent to $28.26 billion, ready-made garments, gems and jewellery, carpets, handicrafts and many other sectors, dominated by micro, small and medium enterprises (MSMEs), showed negative growth. “These are still facing the problem of liquidity as lending agencies have norms and GST refunds have slowed down,” says a third exporter, Ganesh Kumar Gupta, President, Federation of Indian Export Organisations (FIEO).