India Inc optimistic about rise in exports
New Delhi, Nov 7 (IANS) Assurance, tax and advisory firm Grant Thornton’s business confidence report has revealed that policy reforms and the upcoming implementation of the Goods and Services Tax (GST) has buoyed India Inc’s hopes of a rise in exports during the coming quarters.
According to the latest Grant Thornton International Business Report survey, 38 per cent respondents said they expect an increase in exports.
The result shows a three point jump than the previous quarter, when 35 per cent voted for an increase in exports during Q2 2016. Only 13 per cent of the surveyed had positively responded to the expectations of a rise in exports during Q1 2016.
“Ongoing policy reforms measures and the upcoming implementation of GST, coupled with the stability in Indian currency and its competitiveness, has led to an increase in optimism over rise in exports in the coming quarters,” Harish HV, Partner – India Leadership team, Grant Thornton India LLP, told IANS.
“GST is expected to have a positive impact as it will reduce the cost of logistics and hasten-up the movement of cargo. On the global front, the rise in manufacturing cost in China is also expected to lead to a cost advantage for Indian exports.”
The report further disclosed that policy reforms and upcoming implementation of GST has risen India’s rank to the second position on the optimism index during the third quarter (July-September 2016).
The country had ranked third during the April-June quarter after being on top globally for two consecutive quarters.
“High business optimism was also complemented by the rise of employment expectations. India regained its top position on this parameter,” the report said.
“India Inc’s profitability expectations also moved up to rank three from fourth position during the third quarter.”
The report showed that respondents were also optimistic about an increase in R&D investment.
“With an increase of 19 points, 43 per cent respondents are anticipating an increase in investment in R&D activities compared to 24 per cent in Q2 2016,” the report added.
“When it comes to investment in plant and machinery, 46 per cent respondents expect a rise.”
The scale and the report are prepared on the basis of the results of a quarterly conducted global business survey of 2,500 businesses across 36 economies.