Gujral: Exports will not decline due to global conditions

Finance Secretary RS Gujral on Wednesday exuded confidence that exports would not decline due to current global conditions. He allayed fears of any adverse impact on exports in the remaining part of the year.

“(Based on) my own interaction with several exporters who have been exporting to the US and Europe so far there is no decline in getting export orders,” Gujral said at an event organised by Federation of Indian Export Organisation (FIEO).

Led by engineering, chemicals and textiles, India’s exports continued good show in August, growing 44.2 per cent to $24.3 billion despite the slowdown in the US and the Europe.

Gujral admitted importers were adversely affected as their import cost had increased by 10 per cent.

Imports grew by 41.8 per cent to $38.4 billion, leaving a trade deficit of $14.1 billion for August.

However, the growth in both exports and imports has decelerated.

“For exporters you should be laughing. It is increase of roughly about 10 per cent straight away,” he said.

The finance secretary said over a period of time buyers would seek rupee negotiation if the rupee remained at the level, but that could be two to five months away. Balance period of year there are no serious issues, he added.

“The current rate of your exports would give only an increase of five-seven per cent over last year. That does not mean that your exports have decline or has been adversely impacted due to external environment. Your export level will remain will remain the same only the rate of growth vis-à-vis the base rate… The rate of growth of exports has declined because of external environment,” Gujral explained.

For the cumulative period of April-August this financial year, shipments increased by 54.2 per cent to $134.5 billion, while imports expanded by 40.4 per cent to $189.4 billion.

Indian exporters have been tapping newer markets such as West Asia, Africa and South America. The government has set a target of achieving 25 per cent growth annually so that exports touch $500 billion in 2013-14.