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Government predicts flat growth for exports this fiscal
BS Reporter in New Delhi | March 27, 2009 10:25 IST
Indian exports are likely to post a near-flat growth in 2009-10, according to a senior commerce ministry official.
The ministry also expects the pace of job losses in export-oriented units to slow down in the coming months.
"The World Trade Organization has forecast a drop of 9 per cent in word trade during 2009. In this backdrop, we may see nearly $170-billion exports in 2009-10," said Commerce Secretary Gopal K Pillai. In 2007-08, Indian exports grew over 25 per cent and stood at nearly $162 billion.
The ministry had cut its export target by 12.5 per cent to $175 billion for the current fiscal. But with the global recession not showing any signs of abatement, India's total merchandise exports may fall short of the revised target.
"Job losses in the export sector were high between October and January. But it seems the pace of job losses has subsided in February," Pillai added. The commerce ministry had estimated about 109,000 job losses in 402 factories in the period between August 2008 and January 2009.
Exports are expected to stabilise after April. According to Pillai, they will remain steady in the three months ending June, after which there could be a marginal pick-up.
Exports had dipped for four months ending January 2009 as demand from key markets like the United States and the European Union dipped.
The government is hoping that measures contained in the three fiscal stimulus packages announced so far would help the exporters. The measures announced so far include interest subsidy for exporters as well as enhanced export benefits for selling leather and ready-made garment items in the US and Europe.
However, exporters have been asking for greater reimbursement of duties paid while producing goods for overseas sales, as well as exemption from income tax.
"There would not be an across-the-board revival in exports. But gems and jewellery, engineering, petroleum products, pharmaceuticals and chemicals are likely to add some momentum to exports. However, handicrafts are likely to remain weak," said Pillai.