Brushing aside the contention that exchange rate is impacting exports, RBI Governor Raghuram Rajan on Saturday said the shipments can only be increased by raising productivity, improving infrastructure and simplifying regulations, which is in the domain of the Government.
“The bottom line is that even though Indian trade has been slowing, the slowdown is similar to what has been happening elsewhere, with a significant portion due to a fall in commodity prices and a smaller share due to a fall in trade volumes.”
While goods exports may have suffered a little more over the last year, it is too early to discern a clear pattern, and certainly hard to pin the slowdown on the exchange rate,” Rajan said while addressing the first Ramnath Goenka Memorial lecture.
India's exports have been falling continuously since December 2014. It has dipped for a 14th month in a row, down 13.6 per cent in January to $21 billion due to fall in shipments of petroleum and engineering goods.
Observing that exchange rate is unlikely to be a helpful tool in increasing exports, Rajan said the “answer is simple improve productivity by building infrastructure; improve human capital with better schools, colleges, vocational and on-the- job training; simplify business regulation and taxation; and improve access to finance.”