Export sector needs growth impetus.

 New Delhi, July 2 The global economic meltdown is likely to impact India’s export growth in 2009-10.

The subdued global outlook calls for efforts at both national and international levels to revive growth, according to the Economic Survey.

“The outlook for the export sector in 2009 is not very encouraging with IMF projecting a negative growth in world output at 1.3 per cent and world trade volume projected to growth at 11 per cent,” it said.

Demand dip

With import demand falling from major trading partners from India’s export of goods and services is expected to be impacted. The fall in petroleum and commodities prices could have a positive impact in the import side and for the industrial sector. In 2010, recovery is expected with IMF projections at 1.9 per cent for world output and 0.6 per cent for World trade volume of goods and services.

The Government should cut customs duties and streamline export promotion schemes and pay special attention to infrastructure to overcome the contracting exports on account of recession in India’s major trading partners, it said.
No protectionism

The survey also pointed the “need to desist from any protectionist tendencies and proceed on the reform path. Besides short-term relief measures and stimulus packages, some fundamental policy changes are needed”.

For the merchandise trade sector these include continuation of the reduction in customs and excise duty to make our exports and industry competitive, streamlining of existing export promotion schemes, giving special attention to export infrastructure along with rationalisation of port service charges, weeding out unnecessary customs duty exemptions and checking the proliferation of SEZs, it added.

In the services sector a road map of specific policies needs to be drawn not only to overcome the impact of the current global crisis, but also to accelerate the growth of our economy and the total exports as this sector has been showing a steady and promising performance with relatively lesser support.

Meanwhile, the Federation of Indian Exporters Organisation said supportive measures need to be announced in the forthcoming budget.

Source : Business Line