NEW DELHI: The worst seems to be over for Indian exports, which have taken a serious blow due to the global slowdown and shrinking demand in the Western markets, commerce and industry minister Anand Sharma said.
Steps taken by the government have helped exporters, and the contraction in overseas sales is bottoming out, the minister said at an event in the Capital on Friday.
Export growth fell into negative territory in October 2008 and has since failed to recover. With buyers, especially in the EU and US, not coming up with fresh orders, export performance deteriorated in the new calendar year—growth fell by a third in March and April 2009 compared to the same period last year.
“In the last three months, I have looked at the figures, looked at the projections. Surely the worst appears to be over,” Mr Sharma said.
The minister’s optimism is based on the fact that the fall has been less severe in May and June compared to the previous two months. While exports registered a fall of over 33% in March and April this year, in May the fall was less severe at 29.2%. Early estimates for the month of June show a dip of 29%.
The government had announced measures like 2% interest subsidy for certain export sectors as well as enhanced insurance cover. The Union Budget
2009-10 announced this month not only sought to extend the measures till the end of the year, but also enhanced allocation for the Market Development Assistance scheme and abolished fringe benefit tax.
Exporters have also been allowed service tax exemption on some identified services such as goods transport agents and commission agents, where the liability to pay service tax is on the exporter. The move would result in more cash in the hands of exporters as earlier they had to pay tax on these services and given refunds later.
In 2008-09, India’s exports were just 3.4% higher at $168.7 billion compared to $163 billion in 2007-08. While exports registered a 34% growth in the first six months of 2008-09, the downturn hit exports in the second half of the fiscal, bringing down the growth rate to below 4%.
Mr Sharma had earlier said while India is confident of maintaining exports at $168 billion in the ongoing fiscal, it would work towards reaching the export target of $200 billion.
Source : The Economic Times