Hope 2013: pol­icy mat­ters

Cargo Talk - - Editorial -

The lat­est trade data for the month of Novem­ber showed ex­ports at US$ 22.3 bn with a dip of 4.17 per cent and cu­mu­la­tive ex­port for April - Novem­ber at US$ 189 bn with a fall of 5.95 per cent. Re­mark­ably, IIP data for Oc­to­ber 2012 showed 4.5 per cent growth, as against con­trac­tion in pre­vi­ous months. The same will be re­flected in ex­ports with a time lag of 2-3 months. Re­cently, Gold­man Sachs, a global in­vest­ment bank­ing and se­cu­ri­ties firm, in a report pre­dicted In­dia’s eco­nomic growth up to 6.5 per cent in 2013, backed by favourable ex­ter­nal sec­tor de­mand out­look and a pick-up in domestic re­forms.

Though, ex­pect­ing the re­cov­ery of de­mand in the devel­oped economies, In­dia needs to main­tain the fo­cus of its trade pol­icy on de­vel­op­ing new ex­port mar­kets in the emerg­ing and de­vel­op­ing coun­tries where growth prospects in the medium-term re­main con­sid­er­ably bet­ter than in the devel­oped coun­tries.

In ad­di­tion, there should be firm­ness and con­sis­tency in the government poli­cies too. Ex­porters wel­comed the re­cent an­nounce­ment of some sup­port for the ex­port sec­tor as the same will add to the com­pet­i­tive­ness of ex­ports. It is ev­i­dent from the facts that with the slow­down in global trade, pric­ing has be­come a key is­sue, and ex­ten­sion of some fis­cal ben­e­fit by the government will help the ex­porters to fac­tor the same in their prices to pro­cure such or­ders, which hith­erto are be­ing lost by them, ei­ther for wafer thin mar­gins or for a loss.

On the ser­vice providers’ front, lo­gis­tics com­pa­nies need to re­struc­ture their prod­ucts and ser­vices to re­duce cost and pass it on to their cus­tomers. More­over, it is im­por­tant to keep rein­vent­ing to of­fer more value. Only tough de­ci­sions, both from government as well as in­dus­try peo­ple, can bring-in the fis­cal dis­ci­pline and wind of change in 2013.

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