India’s merchandise exports likely to increase about $60-70 billion to $500 billion in FY25: FIEO

17 May 2024 Evaluate

Federation of Indian Export Organisations (FIEO) President Ashwini Kumar has said that the country's merchandise exports are expected to increase about $60-70 billion to $500 billion by the end of FY25 on account of gradual improvement in global demand. In 2023-24, exports dipped over 3 per cent to $437.1 billion. He also said the country's services exports are also likely to reach $390-400 billion this fiscal. He said traditional markets like the US and Europe will help boost India's exports. Sectors such as electronics, electricals, engineering, and pharma will play a key role in boosting shipments.

However, the President said they are concerned as labour-intensive sectors like knitted and woven garments, footwear, gem and jewellery are doing good. In the footwear sector, while global imports grew at a CAGR of 5 per cent, India's exports contracted. The focus on skilling is still lacking as per piece production in many segments is much less as compared to Vietnam, Indonesia, Bangladesh, Cambodia. He suggested that the government address certain issues such as credit flow, interest subsidy and set up e-commerce hubs in the country to provide a cushion to the exporting community.

He further said the share of export credit in the net bank credit is extremely low and not commensurate with the share of India's exports in the GDP, which is over 20 per cent. The demand for the credit has gone up with rising inflation, high commodity prices and abnormal increase in sea as well as air freight.

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