Having seen ups and downs during the year, India's exports are expected to register a healthy growth during 2014 on account of improvement in the US, Europe and Asean region markets.
The country's merchandise shipments, which were mostly in negative zone during the first half due to the global slowdown, started posting healthy growth during second half.
From July, the exports grew in double digits and in fact registered a two-year high growth in October (13.47%). However, the growth rate moderated to 5.9% in November.
While efforts to diversify from traditionally strong markets of the US and Europe yielded positive results, continued dependence on western economies led to slow growth in overall merchandise shipments. The US and Europe account for about one-third of India's exports.
Although the country's exports surpassed the $300-billion mark during 2012-13 and 2011-12, the country's trade deficit also touched an all-time high of $191 billion during the last fiscal as imports surged.
A widening trade gap directly impacts current account deficit (CAD) and the rupee. The CAD touched a historic high of 4.8% of GDP in 2012-13 and this was mainly attributed to high imports of gold and petroleum products.
A high level of CAD puts pressure on the rupee, which has depreciated by about 15% since April 30.
Building on the recent momentum, India's exports during the current fiscal are likely to touch $325 billion on the back of improved demand in the US and Europe.
According to an official in Commerce Ministry, any problem in the global market will impact India as its integration with global trade has reached a high level.
On a cautious note, the World Trade Organisation (WTO) has slashed its forecast for trade growth in 2013. It cut its forecast for global trade growth in 2013 to 3.3% from 4.5%. For 2014, it has cut down the forecast to 4.5% from 5% earlier.
The Federation of Indian Export Organisations (FIEO) has said the year 2013 had been not good for exporters.
"2013 was not a good year for exports. The first half was bad but it improved from July. We expect that 2014 should be okay because markets like the US and Europe are stabilising," FIEO President Rafeeq Ahmed said.
Seeking to boost exports, which slipped 1.76% in 2012-13, the government had unveiled a slew of incentives for exporters and a package to revive special economic zones (SEZs). These zones account for 30% of total exports.
Sharing similar views, Rakesh Mohan Joshi, Professor with the prestigious Indian Institute of Foreign Trade (IIFT) said there is an urgent need to put special focus on increasing the competitiveness of Indian products.
"We had problems in the first half of 2013. Our exports picked up later. I think, the trend would continue and in 2014 prospects would be better," Joshi added.
Sectors which are expected to do well include engineering, textiles and pharmaceuticals.