Concerned over fall in India's export at a time of accelerating global trade, Crisil recently called for fast structural changes in labour-intensive sectors like apparels. Recent subdued export performance can be attributed not to unfavourable currency competitiveness but to domestic factors like disruption due to the goods and services tax regime, it said.
Global merchandise trade is expected to grow stronger at 4.2 per cent, making world trade growth higher than world gross domestic product (GDP) growth. Yet, India's exports have not been able to take advantage of this unlike countries like Vietnam, South Korea and Indonesia, a press release by the rating agency said.Concerned over fall in India's export at a time of accelerating global trade, Crisil recently called for fast structural changes in labour-intensive sectors like apparels. Recent subdued export performance can be attributed not to unfavourable currency competitiveness but to domestic factors like disruption due to the goods and services tax regime, it said.#
This is evident in the low export growth in sectors, such as gems and jewellery, textiles and leather, which are also the most labour-intensive sectors, Crisil pointed out, saying employment in these sectors may be hit as a result. The competitiveness of these sectors has been on a sequential decline.
The latest disruptions, earlier on account of demonetisation and now due to the goods and services tax, might have pushed the competitiveness of these sectors further to the brink, Crisil said.
Though disruptions related to policy changes are transitory, the structural issues plaguing these sectors need to be addressed in order to boost their competitiveness in the global market, the agency added. (DS)
Fibre2Fashion News Desk – India
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