The impact of slowdown on India's exports, which declined in October and November over the year-ago periods, will be short-lived and foreign investors will return to the country along with China faster than other economies, says a Planning Commission official.
"In fact, these economies will be the first ones to which investors, both foreign institutional investors (FII) in the capital markets as well as foreign direct investment (FDI) in productive assets will return the fastest," Planning Commission Senior Adviser (Rural Development) and Head, Development Policy Division, Santosh Mehrotra said.
"The current decline in export earnings will simply be a blip on the screen for a year or so in countries like China and India with much larger domestic markets, where the investment in any case has been driven by large and growing domestic savings, and demand by large and growing domestic markets," he said.
He added that this was for two reasons - first, there will still be fewer opportunities in their own economies, as well as the rest of the world; and second, growth in both China and India is not projected by any analyst to drop below nine per cent per annum in China and seven per cent per annum in India.
India's exports dropped to $11.5 billion in November this fiscal from $12.7 billion a year ago while exports contracted by 12.1 per cent in October, showing a negative trend for the first time in the last five years.
Source : Business Standard