Finance minister Nirmala Sitharaman on Wednesday exhorted exporters to be receptive and 'foresee' how the recession or slowing economy abroad will pan out for them, while asking them to constantly engage with the government.
Stating that external uncertainties are far more 'unpredictable' and therefore challenging, Sitharaman said in a post-pandemic, post-war world, and where there is a repeat occurrence of virus, there is no fixed 'template' to deal with uncertainties.
With regard to imports, she assured the industry that the government is looking at specific items to see which are going to be consistently needed for next few years as well as those whose import could hurt domestic manufacturers.
"The changes abroad, recession abroad or the slowing economy abroad are all going to be challenge for Indian exporters. So Indian exporters will have to be far more receptive of what is happening there or even foresee how that will pan out for them and keep constantly engaging with the government otherwise at a time when exporters have to be on their toes, such challenges demotivate them," Sitharaman said at the Assocham event here.
The minister's comments came after commerce ministry data showed that India's exports dipped by 6.58 per cent to USD 32.91 billion in January -- second straight month of decline -- due to slowdown in global demand.
Imports in January too contracted by 3.63 per cent to USD 50.66 billion.
Sitharaman further said that customs authorities at the borders are keeping a tab on both exports and imports.
"No way are we blanket taking a position, we are looking at specific items to see which are going to be consistently needed for next few years and which are going to hurt us. Those which cause hurt we are ready to act," the minister said.
She also asked businesses to keep the government informed with the input on import of items which they think could hurt domestic industry as well as those which are essential input in manufacturing.
"We have gone item wise in customs duty and therefore we were able to bring it down in 18-20 categories... We will bring it down at the same time keep a very close watch on flooding or surge in any kind of imported goods. Even if the surge was only for 3 months, it can hurt us for full year. So there is a very keen eye being kept on what's happening in our borders in terms of exports and in terms of imports," Sitharaman said.
The minister said the priority of the government is growth and in the last three budgets, the government has kept up the momentum by increasing public spending on infrastructure projects
The Budget 2023-24 hiked capital expenditure by 33 per cent to Rs 10 lakh crore, which is 3.3 per cent of Gross Domestic Product (GDP).
"We did so last time and, in the year before, we have made sure we achieved the target. We have maintained the momentum in achieving the target laid out and that is going to be a challenge for me in reaching the Rs 10 lakh crore in 12 months. The challenge is more in achieving it," Sitharaman said.
She said the Budget has kept some cushion to deal with the extraneous shocks and the government is ready to make sure that the critical inputs required by farmers, industry and common man are available.
"In India, we have handled those issues which are unpredictable, inclusive of monsoon, inclusive of unseasonal weather vagaries over years very well." Sitharaman said, adding the government has lessons on how to manage issues such as inflation and supply chain disruptions due to domestic conditions.
However, external uncertainties are more challenging as "we don't have template before us" to deal with those exogenous economic shocks, she said.
The COVID-19 pandemic and Russia-Ukraine war led to supply chain disruptions, leading to high inflation. Central banks globally have been tightening monetary policy to tame inflation, but that has also led to fears of recession in advanced economies.
