A day after data showed India’s growth in 2011-12 was the lowest in nine years, data on merchandise exports was also disappointing. Exports in April rose a mere 3.23 per cent to $24.45 billion, against $23.69 billion in April 2011, primarily owing to the euro zone crisis.
However, Commerce & Industry Minister Anand Sharma was hopeful of a 20 per cent rise in exports in the current financial year, compared to the previous one, even as he expressed concern over the poor health of the domestic economy and the challenges emanating from the developed world.
“I hope we stay on course for an annual increase of 20 per cent.…We are going to implement a plan of action to help take India’s exports to $500 billion by 2014. We know this would be challenging, given the deceleration in developed countries and the contraction and movement towards contraction in the euro zone, which has also adversely impacted trade as such,” Sharma told reporters after the Board of Trade meeting held here on Friday.
The meeting of the Board of Trade, an advisory body on foreign trade to the government, was attended by Finance Secretary R S Gujral, Commerce Secretary S R Rao, Secretary in the Department of Industrial Policy and Promotion Saurabh Chandra, External Affairs Secretary (external relations) Sudhir Vyas, Textiles Secretary Kiran Dhingra and Director-General of Foreign Trade Anup K Pujari. Industry leaders, including ICICI Bank Managing Director and chief executive Chanda Kochhar, ITC Chairman Y C Deveshwar, presidents of the Confederation of Indian Industry, the Federation of Indian Chambers of Commerce and Industry and the Associated Chambers of Commerce and Industry and members of the export promotion councils, also attended the meeting.
Suggestions by the industry and exporters would be incorporated in the annual review of the Foreign Trade Policy (FTP) 2009-14, to be unveiled on June 5.
In April, imports rose 3.83 per cent to $37.94 billion, compared with $36.54 billion in the year-ago period. Imports of oil stood at $139 billion, a rise of 6.96 per cent over $130 billion in April 2011, while non-oil imports grew 2.11 per cent to $24 billion, compared with $23.53 billion in the year-ago period, according to data released on Friday.
As both exports and imports grew moderately, trade deficit rose slightly — 4.98 per cent to $13.49 billion in April, against $12.85 billion in the corresponding period of the previous year.
Sharma said his ministry and its finance counterpart were constantly discussing ways to chalk the incentive package to be doled out to exporters. He added the government was considering extending the interest subvention scheme to all export sectors.
“It is not only about incentives to exporters, we have to take a holistic view to ensure we remain competitive globally when it comes to India’s exports….keep on increasing our share in world trade….It is important for India to have a sustained thrust on exports, given the challenges we face,” he said.
In the FTP, the government is expected to focus on labour-intensive sectors. Prolonging the interest subvention scheme for a year is also on the agenda.
On the constant fall of the rupee against the dollar, Finance Secretary R S Gujral said, “Prima facie, depreciation in the rupee would tend to help exporters, in terms of higher realisation in rupee terms.…In the short term, contracts have already been signed at all-year rates. Due to this, their imports become more expensive. So, it does hurt them.”
Sharma said the depreciation in the rupee was being studied by the government, and he was hopeful of a “turnaround.”