New Delhi, Sept 17 (KNN) Despite, impressive performance of exports, some sectors like plantations, marine products, RMG of all textiles, jute manufacturing including floor covering, which mainly belong to MSME sector, are still in negative territory because of low competitiveness and liquidity crunch, Ajay Sahai, Director General & CEO, Federation of Indian Exports Organization (FIEO) told KNN India.

Explaining the reasons of negative performance in these sectors, Sahai said these sectors are no longer competitive as compared to other countries.

He said “Our neighbouring countries or our competitors have become more competitive. They have more competence compared to us.”

Many of these sectors are also facing liquidity problem because of poor flow of credit to these sectors. Even much of their liquidity is blocked because of blockage of funds by the government, he pointed.

FIEO pointed that some of the small and micro sectors of exports are still reeling under pressure because of the liquidity crunch as banks and financial institutions have continuously been tightening their lending norms and Input Tax Credit refund for exports still poses a challenge.

According to the official trade data recently released by the Government, the country's trade deficit in August fell to USD 17.4 billion from a five-year high of USD 18.02 billion in July as exports rose at its fastest pace in three months to reach USD 27.84 billion.

However, trade deficit in August last year was much lower at USD 12.72 billion.

Exports in August rose 19.2 per cent on account of a healthy growth in petroleum products, engineering, pharma, and gems and jewellery shipments.

Reacting to the trade data, FIEO had said that consecutively for fourth month in a row exports have shown a higher double-digit growth of 19.21 percent.

In their release, FIEO mentioned “though some of the MSME sectors of exports have come into positive territory including gems & jewellery, leather & leather products, cotton yarn/fabs/made-ups, handicrafts excluding handmade carpet and some of the agri-products but others such as plantations, marine products, RMG of all textiles, jute manufacturing including floor covering are still in negative territory or have shown negative growth during the month.”

It pointed that only 17 out of 30 major product groups were in positive territory during August, 2018.