With the US, India’s largest destination for merchandise exports, showing a robust economic growth, its best in the last four years, Indian exports hold a promising outlook, helping the country’s macro picture, an ASSOCHAM Paper has noted.
The US economy grew by 4.2 per cent in the second quarter of this year, the best in about four years despite a tariff war with China.
“The US accounted for about a good chunk of 16 per cent of India’s total merchandise exports of USD 303 billion in the fiscal 2017-18 with the annual growth of 13.42 per cent. It is the largest market for Indian exports, both for merchandise and even services. So, when the US grows at its current pace, it augurs very well for the total Indian exports’ basket” the ASSOCHAM Paper said.
It said India’s exports to the US showed a growth trend of over 13 per cent in the last fiscal, ended March, 2018. “With exception of June, 2018 the same trend line is visible in the current financial year as well. In fact, going forward, this should only improve as rupee decline against the US dollar is resulting into higher realisations for the exporters at home, making them more competitive,” the chamber said.
It said a sharp drop in rupee may have caused a burden on the country’s import bill, but the net realisations for exporters have increased significantly. According to the trade data for August, 2018 while exports have shown a growth of about 19 per cent in dollar terms, the rupee realisations for the export shipments went up close to 30 per cent.
With further streamlining of exporters’ GST refunds, their competitiveness should also improve, helping them in the global market.
Engineering goods, chemicals, gems and jewellery are among the major items of exports to the US from India. With the focus of the Trump administration on infrastructure build –up, the demand for Indian exports, particularly of steel and other engineering goods should increase. Besides, with the festival season around the corner, the orders for the gems and jewellery should also look up.