§ Mr. HAMMERSLEYasked the Secretary to the Overseas Trade Department whether he will make a statement on the general progress of trade with India recently, with special reference to the prospects of increased trade between India and Lancashire?
§ Major COLVILLEThe following statement shows the recent progress of trade between the United Kingdom and India:
In a recent despatch dealing with the position of trade in India, His Majesty's Senior Trade Commissioner in India 1028W pointed out that the past 18 months have been a very critical period in the history of trade between the United Kingdom and India. India was already experiencing, in increasing measure, economic depression, which is a world wide phenomenon, when the commercial relations between India and this country began to suffer reactions from the unsettled political conditions, of which the boycott of foreign goods was, perhaps, the most remarkable manifestation in the field of commerce. The general result was of a disastrous character as regards both internal and external trade: heavy losses were suffered by traders, and a severe blow was dealt to India's credit overseas. The economic slump and the unsettled political situation combined to affect most prejudicially the position of United Kingdom manufacturers in important branches of the import trade, and to stimulate the substitution of the lower-priced products of indigenous manufacturers and of our foreign competitors. Although the influence of the political movement is, at the moment, waning, the deepening of the agricultural depression and the widespread lack of confidence in the future are factors which must inevitably retard recovery.
In referring to the temporary suspension by the United Kingdom of the Gold Standard and to the linking of the rupee to sterling at the existing ratio of 1s. 6d., the Senior Trade Commissioner indicated that, in his opinion, this measure could not fail to act as a powerful stimulus to India's exports to countries which are still on the Gold Standard, among which are some of her principal customers, e.g., the United States, Japan, Germany, France and Italy. Conversely, the depreciation of sterling now enables United Kingdom exporters to quote rupee prices below those which, in many cases, can be quoted by manufacturers and exporters in countries which still adhere to the Gold Standard, notably Germany, Japan and the United States, who may be regarded as our keenest rivals in the Indian market. Other things being equal, therefore, there should be, in terms of rupees, a considerable advance in price of India's principal agricultural products with a corresponding increase in the purchasing power of the people; this increased purchasing power may be expected to be reflected in a greater demand for 1029W imported goods. It is to be hoped that the United Kingdom manufacturer, by reason of this advantage in exchange, will take every opportunity to secure an increased proportion of the trade available.
The trade returns of British India for the month of September, 1931, as compared with the preceding month, show an increase in the imports of private merchandise, amounting to Rs.23 lakhs. Under the heading "manufactured articles" imports of cotton yarn and manufactures showed an improvement of Rs.6 lakhs; and the yardage of piece goods imported rose from 49,000,000, valued at Rs.1,17 lakhs to 67,000,000 valued at Rs.1,26 lakhs.
According to the Indian Trade Returns for August, 1931, which contain the latest complete statistics available, the total imports for the month of August were Rs.9,66 lakhs, as compared with Rs.12,74 lakhs for August, 1930; the imports for the five months April to August, inclusive, were Rs.56,48 lakhs, as compared with Rs.76,23 lakhs for the same period of the preceding year.
The following figures show the imports of cotton goods into India from the United Kingdom for the five months 1st April to 31st August as compared with the corresponding five months of 1929 and 1930 (the figures are given in lakhs of rupees):
1030W
— 1929. 1930. 1931. Twist and Yarn: United Kingdom 153 69 48 Total 284 149 115 Piece goods: (Grey Unbleached). United Kingdom 480 225 49 Total 847 441 176 Piece goods: (White bleached). United Kingdom 559 342 198 Total 605 392 245 Piece goods: (Coloured, printed or dyed). United Kingdom 418 299 111 Total 653 424 196 The Senior Trade Commissioner states that at the present time there appears to be a more optimistic undertone in the Calcutta market and that slightly more interest is being shown in Lancashire goods; items such as cotton prints, which have been entirely neglected for many months, are now attracting attention. The Senior Trade Commissioner also refers to the fact that there has recently been a very heavy fall in the prices which holders are demanding for Japanese goods in stock, and a material decline in the rates of Indian mill goods. Both Bombay mill goods and Japanese manufactures, particularly bleached goods, are being sold at prices which are below the cost of replacement.
Since the suspension of the Gold Standard the prices of Japanese, Italian and other Continental piece goods have all advanced on the Indian market; with the result that some interest is taken by local importers in United Kingdom products at their current prices. It is feared, however, that while the Indian consumer is receiving less than half pre-War prices for his jute and considerably reduced prices for other staple products he cannot afford to purchase the usual quantities of piece goods: it would therefore be idle to hold out hopes of greatly improved trade for Lancashire in the Indian market until some hardening takes place in the world prices of the commodities of which India is normally an exporter on a considerable scale, such as jute, raw cotton, cereals, hides, tea, oilseeds, etc.