Indian Exports Need Enhances Competitiveness Amid Global Uncertainty: Finance Ministry Report

New Delhi, Feb 21 (KNN) The Finance Ministry underscored the urgency of enhancing India's export competitiveness in light of ongoing global uncertainties, according to its Monthly Economic Review report for January, released on February 20.

Amid geopolitical tensions and disruptions in global supply chains, including recent attacks on commercial vessels in the Red Sea by Houthi rebels of Yemen, India faces challenges in maintaining export growth.

The report highlights concerns over higher logistics costs and supply-chain disruptions, which pose risks to India's export growth trajectory.

The latest trade data revealed a modest 3.1 per cent year-on-year increase in India's merchandise exports in January, reaching USD 36.92 billion.

However, this growth could have been higher if not for disruptions caused by the Red Sea crisis, forcing freight companies to seek alternative routes or wait for safe passage through the Suez Canal.

The Finance Ministry also warned of potential downside risks to trade, including spikes in commodity prices due to geopolitical shocks and supply disruptions, which could dampen global demand and consequently impact India's export prospects.

Despite these challenges, the Ministry remains optimistic about the broader economic outlook.

It anticipates favourable conditions driven by factors such as robust Rabi harvesting, sustained manufacturing profitability, and resilient services sector performance.

Moreover, with improving business sentiment, private capital expenditure, and government focus on capital expenditure, the outlook for fixed investment appears promising.

The report highlighted India's resilience amid the pandemic, attributing it to past reforms and robust economic fundamentals.

Notably, global agencies have revised India's growth projections upward for FY24, reflecting confidence in the economy's strength.

Strong private consumption remains a cornerstone of India's growth story, supported by broad-based responses from the supply side.

Additionally, government interventions have helped contain food inflation, with expectations of further moderation in the future.

(KNN Bureau)