FIEO pegs FY25 goods exports at $500-510 billion

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New Delhi: The Federation of Indian Export Organisations (FIEO) expects India’s merchandise exports increase around 14% to $500-510 billion in FY25 from $437 billion in 2023-24, led by technology driven sectors of exports such as machinery, electrical and electronic, automobile, pharma and biotechnology which have received a fillip from the production-linked incentive schemes.It has pushed for Social Media Marketing and exploring the potential of social media like Facebook and Instagram for promoting e-commerce exports.“The export prospects are better for FY25…We are looking at merchandise exports between $500-510 billion in 2024-25. In services, we expect exports to be around $ 390-400 billion for the current fiscal,” said FIEO President Ashwini Kumar, adding that India’s traditional markets such as the US and Europe and utilisation of India’s free trade agreements with Australia, the UAE and EFTA will boost exports.Among services, management consultancy and medical tourism are seen growing.The apex exporters body also hasn’t ruled out dumping of Chinese goods in the wake of the US imposing high duties on goods such as EVs, batteries and high end technology products.“Dumping isn’t ruled out because China is sitting on overcapacity and one of its large markets may close its doors to it,” he said.Exporters have sought visas for Chinese technicians and engineers who are required to visit India for setting up factories or machinery here.“Workers from Taiwan come at four times the price and those from Vietnam are not as expert as the Chinese workers,” said an exporter.FIEO highlighted the concerns with regard to labour-intensive sector of exports like knitted and woven garments, made-ups, footwear, gem and jewellery, in which the country lost market to its competitors.Red Sea crisisMoreover, sea freight has risen to $3,700 from $700 due to the conflict in the Middle East which also added to the transit time.On the Red Sea crisis, it said that it is having a “significant negative impact on both sea freight and air freight, which is in turn affecting Indian exports”Rerouting ships has impacted the bottom lines of exporting companies which is especially harsh for products having large volume low value like commodities, where costs have reportedly gone down. “The longer routes caused by rerouting mean extended shipping times. This has led to disrupt delivery schedules and lead to spoilage of perishable goods,” it said.As some goods traditionally shipped by sea are being diverted to air due to the crisis, there is a rise in air freight demand which has pushed air cargo costs upwards, with some reports suggesting a jump of over 300% for routes like India to Europe.“Overall, the Red Sea crisis is creating a challenging situation for Indian exporters,” FIEO said, adding that India has lost few orders due to high freight rates particularly in metal and commodities. Besides reduced competitiveness, delays and higher costs can disrupt the smooth flow of Indian exports, leading to potential order cancellations and reputational damage.He said that due to the crisis, near sourcing is happening in the affected countries and clients are cautious on how much stocks they should hold.Ajay Sahai, director general, FIEO said that now while negotiating contracts, both the exporter and importer take the hit of increased prices. Sahai said that countries are looking at India for long term supply.FIEO has suggested the government to setup an export development fund to support MSMEs with a budgetary outlay of 1% of last year’s exports, highershare of export credit in the net bank credit and a sub-target for exports within overall target for the priority sector lending.It also pushed for a linkage between FDI and tariff policy coupled with standards and quality control.

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