So, are exports unscathed by government’s inflation control measures—such as bans on exports of edible oil, rice and cement? The Federation of India Export Organisations says yes, with a caveat. “Crude oil prices are shooting through the roof; the prices of other commodities, such as gold and steel, are spiralling, too. So, the value of exports—and not necessarily its volumes—is going up. Then, the effect of the depreciating rupee has also boosted the value of exports,” says G.K. Gupta, President, FIEO.
But the scenario is not as happy as the figures suggest. Already, Indian rice exporters are facing threats of lawsuits from foreign buyers following the ban on the export of the commodity.
And FICCI has estimated that the export tax on steel could force steelmakers to defer their Rs 1,00,000 crore expansion plans. “The government’s inflation-control measures are pushing foreign buyers to lose faith in Indian exporters,” says Gupta.