New Delhi, Sept 21 (KNN) India’s merchandise exports are going to hit the lowest in five years at the end of 2015-16 closing the current fiscal between USD 265-268 billion, significantly lower than USD 310 billion in the previous fiscal, thanks mainly to a sharp erosion in commodity prices in the global market, forecasted a study.

“Indian exports had achieved a landmark of USD 300 billion in 2011-12 for the first time making the country a sizeable player in global exports.  Afterwards somehow, for one reason or the other we could reach a maximum of USD 314 billion in 2013-14, only to retrieve in the following year at USD 310 billion,” said the ASSOCHAM study on “Export Outlook in the face of commodity Meltdown”.

It said that the global merchandise economy has moved away sharply from a very high cost, ultra-bullish commodity situation to a bearish and low cost situation where demand relates mainly to the actual consumption which is rather low key.

“The pricing power as was being mirrored in the futures trading markets all over the world – be it for crude oil, metals, coal, copper or even edible items turned out to be rather myopic and has totally disappeared. Thus, there is no sentiment build-up around commodities and thus the demand is actually restricted to the real consumption. Nobody is willing to bet for futures and thus there is a meltdown in prices”, said the study.

It further stated that with the erosion in price tags, the exports in value terms have dropped while in volume, the scenario is not that bad across sectors. 

However, the erosion is consumption demand, which is more disturbing is seen in leather goods, apparels, gems and jewellery. These products are not a commodity play and reflect the slowdown in consumption and pressure on the consuming economies.  For India, they mean a large scale employment, the study noted. (KNN Bureau)