<p>New Delhi: The escalating geopolitical tension may have implications for the country's exports in the first quarter of 2024-25 as it is likely to impact global demand, apex exporters body FIEO said.</p>.<p>The global uncertainties caused by continuing war between Russia and Ukraine has impacted India's outbound shipments in 2023-24, which recorded a decline of 3.11 per cent to USD 437 billion. Imports too dipped by over 8 per cent to USD 677.24 billion.</p>.Commerce ministry working on infrastructure needs to achieve $1 tn goods exports target by 2030, says official.<p>"If the global situation continues to be like this, it would impact global demand. In the first quarter numbers, the demand slowdown may be visible," FIEO Director General Ajay Sahai said.</p>.<p>He added that despite all the challenges, freight rates are softening and it is giving an indication that demand may be impacted in the times to come.</p>.<p>He cautioned that further escalation of the current situation could have serious implications on the world trade.</p>.<p>"Besides geopolitical uncertainties, high inflation and high interest rates are also crucial reasons for demand slowdown," he said, adding certain advanced economies like Europe may witness more slowdown.</p>.<p>He also said that India's domestic currency depreciated only about 1.3 per cent during 2023-24 as against Chinese Yuan's 4.8 per cent; Thai Baht 6.3 per cent and Malaysian Ringgit's 7 per cent.</p>.<p>When asked about the impact of Israel-Iran war, he said certain exporters from engineering sector have stated that the demand for goods that are going to the UAE and then to Iran has come down.</p>.<p>Jewellery demand may also come down, he said.</p>.<p>The director general suggested the government to take certain steps for exporters at the liquidity front.</p>.<p>"Due to demand slowdown, offtake of goods will be low so foreign buyers will also take a longer period to make payments. So we require funds for longer period. Exporters also need interest subvention support," Sahai said.</p>.<p> He asked for continuation of interest equalisation scheme.</p>.<p>On December 8, 2023, the Union Cabinet approved an additional allocation of Rs 2,500 crore for the continuation of the scheme up to June 30.</p>.<p>The scheme helps exporters from identified sectors and all MSME manufacturer exporters to avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds. Exporters get subsidies under the Interest Equalisation Scheme for pre- and post-shipment rupee export credit.</p>.<p>"The rates should be enhanced to 3 per cent and five per cent," he said.</p>.<p>He added that technology and knowledge-based sectors like electronics, electricals, telecommunication, machinery, auto, pharma, medicine and diagnostics would help achieve USD one trillion exports by 2030.</p>.<p> "But we have a problem in labour intensive sectors like apparel, footwear, and gems and jewellery as our market share is going down," he said. </p>
<p>New Delhi: The escalating geopolitical tension may have implications for the country's exports in the first quarter of 2024-25 as it is likely to impact global demand, apex exporters body FIEO said.</p>.<p>The global uncertainties caused by continuing war between Russia and Ukraine has impacted India's outbound shipments in 2023-24, which recorded a decline of 3.11 per cent to USD 437 billion. Imports too dipped by over 8 per cent to USD 677.24 billion.</p>.Commerce ministry working on infrastructure needs to achieve $1 tn goods exports target by 2030, says official.<p>"If the global situation continues to be like this, it would impact global demand. In the first quarter numbers, the demand slowdown may be visible," FIEO Director General Ajay Sahai said.</p>.<p>He added that despite all the challenges, freight rates are softening and it is giving an indication that demand may be impacted in the times to come.</p>.<p>He cautioned that further escalation of the current situation could have serious implications on the world trade.</p>.<p>"Besides geopolitical uncertainties, high inflation and high interest rates are also crucial reasons for demand slowdown," he said, adding certain advanced economies like Europe may witness more slowdown.</p>.<p>He also said that India's domestic currency depreciated only about 1.3 per cent during 2023-24 as against Chinese Yuan's 4.8 per cent; Thai Baht 6.3 per cent and Malaysian Ringgit's 7 per cent.</p>.<p>When asked about the impact of Israel-Iran war, he said certain exporters from engineering sector have stated that the demand for goods that are going to the UAE and then to Iran has come down.</p>.<p>Jewellery demand may also come down, he said.</p>.<p>The director general suggested the government to take certain steps for exporters at the liquidity front.</p>.<p>"Due to demand slowdown, offtake of goods will be low so foreign buyers will also take a longer period to make payments. So we require funds for longer period. Exporters also need interest subvention support," Sahai said.</p>.<p> He asked for continuation of interest equalisation scheme.</p>.<p>On December 8, 2023, the Union Cabinet approved an additional allocation of Rs 2,500 crore for the continuation of the scheme up to June 30.</p>.<p>The scheme helps exporters from identified sectors and all MSME manufacturer exporters to avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds. Exporters get subsidies under the Interest Equalisation Scheme for pre- and post-shipment rupee export credit.</p>.<p>"The rates should be enhanced to 3 per cent and five per cent," he said.</p>.<p>He added that technology and knowledge-based sectors like electronics, electricals, telecommunication, machinery, auto, pharma, medicine and diagnostics would help achieve USD one trillion exports by 2030.</p>.<p> "But we have a problem in labour intensive sectors like apparel, footwear, and gems and jewellery as our market share is going down," he said. </p>