CENTRE may set a target of $ 360 billion for merchandise exports in next financial year with an estimated 20 - 22 per cent growth.
This comes close on heels of continued uncertainty in EU and US, two largest markets of Indian exports and would be lower than the earlier target of 25 per cent growth per annum to double India’s exports to $450 billion by 2013-14.
After deceleration since July 2011, Indian exports have started moving up with December 2011 registering a very modest growth of 6.7 per cent at $25 billion.
Commerce secretary Rahul Khullar felt that last quarter of the ongoing financial year will see rebound in exports with lag effect of rupee depreciation coming into picture. “Generally exports are 10-15 per cent higher in the last quarter as a result of which we hope to achieve the export target of $300 billion for 2011-12. With trade deficit being pegged at $155-160 billon, imports are likely to be $460 billion in 2011-12,” he said. In November, commerce ministry had revised down the April-October export data by $9 billion, calling it a computing error. This was on the back of over estimation of engineering goods and under estimating of petroleum products as well as gems and jewellery.
Commerce secretary Rahul Khullar clarified that it is the customs department that collects the data when shipments leave the country from ports and airports and the DGCI&S gets its data from customs officials.
“Not all ports in the country are computerised. While data from computerised ports reach within a short time, others send it manually and this takes time,” he said.
On the contrary, Federation of Indian Exports Organisation has projected $280 billion exports for this fiscal. “While 25.8 per cent growth in first nine months looks impressive, it is much less than 33.2 per cent growth achieved in April – November 2011. Even percentage growth in respect of most sectors has also come down at disaggregated level and consequently we will be able to achieve over $280 billion in 2011-12,” M Rafeeque Ahmed, president of FIEO said. He added that increasing trade deficit is serious cause for concern as it is likely to swell the import bill in rupee having adverse effect on inflation.
As per the data released by commerce ministry on Monday, cumulative merchandise exports from India in first three quarters up to December 2011 has gone up by 25.8 per cent to $217.6 billion while imports have seen an increase of 30.4 per cent at $350.9 billion, resulting in a trade deficit of $133.3 billion.
According to Khullar, next financial year will be even tougher than the current year as looming uncertainties in EU and US will lead to contraction in demand. “The slowdown in demand in EU will result in slowdown in exports as well as imports for intermediates for sectors like gems and jewellery and petroleum products. So I will be happy even if we see 20-22 per cent growth next year,” he said.
Agreeing to difficult times ahead, Ahmed of FIEO feels that the cost of credit needs to be brought down so that both manufacturing and exports become competitive. “There is a need for bold economic and monetary reforms, including rolling out of GST for sustaining the momentum in exports and containing high volatility in the exchange rate,” Ahmed added.
Notwithstanding the anticipated lower export growth in 2012-13, commerce ministry officials felt that there was no case for any assistance to the exporting community in the upcoming budget. “There is no scope of any financial leeway to any sector in the budget because of already large fiscal deficit that is causing pressure on interest rates and monetary policy,” Khullar added.
Source : mydigitalfc.com