India may miss revised export target too

With the global economic crisis not showing any signs of abatement, India may miss the export target of $175 billion for 2008-09, which was recently revised downwards from $200 billion.

“If we touch exports of $170 billion, it will be good. We will not touch $175 billion,” Commerce Secretary Gopal K Pillai said today.

India had exported close to $162 billion worth of merchandise goods in 2007-08.

Overseas sale of Indian goods has been shrinking for four consecutive months ending January 2009.

The commerce ministry estimates that total exports in March would be around $12 billion, a drop of about 30 per cent over $17 billion seen in the same month of 2008.

Initial export figures available with the ministry suggest that exports in February also dropped 13.7 per cent ($13.04 billion).

Recovery in second quarter: The commerce secretary said exports would recover from the current slump in the second quarter (July-September) of next fiscal as some sectors like textiles and gems and jewellery were showing signs of recovery. “I expect in the April-June period, exports will stabilise and thereafter there would be recovery,” said Pillai.

“Textile is now stabilising. Though they have not got orders for six months, but exporters from the sector have orders for at least 60-90 days. Most of the mills are now operating. Lack of orders is slowly going away. Even in gems and jewellery, there is a slight pick up. Handicrafts are still down. Leather is picking up. By the end of this month, we would have reached the bottom. Thereafter, I am hopeful that we will stabilise,” said Pillai.

The government has announced a series of measures since December 2008 to boost exports, which include interest subsidy on export related loans as well as additional reimbursement of taxes paid on inputs used to manufacture items for overseas sales.