New Delhi: India is facing a threat of dwindling exports as leading world economies head towards a slowdown.
Worrying trend: Commerce minister Kamal Nath. Exporters are under pressure as the US is caught in an economic slowdown. Ramesh Pathania / Mint
The country’s trade deficit for the current fiscal is expected to be around $121 billion (Rs5.78 trillion), says research firm Dun and Bradstreet (D&B).
Indian exporters are under increasing pressure as the US, which is the single largest export destination for India’s goods and accounted for about 13% of Indian exports in 2007-08, is heading for a possible slowdown.
Considering the magnitude of trade transactions and the current economic environment in the US, it has become even more imperative for Indian businesses, especially exporters, to exercise abundant caution in cross-border transactions, D&B said in its latest report.
“As India is an export-led country, slowdown in the global economies is likely to dent the growth prospects for India. For the current financial year, we are projecting 7-8% growth; however, the coming year looks challenging,” chief operating officer Kaushal Sampat said.
Separately, industry body Assocham, too, said the country’s exports are likely to miss its target of $200 billion by 20% this fiscal. In its study, “Realistic Exports vs The Targeted One”, it cited the slowdown syndrome , rising ocean freight rates and certain export restrictions imposed by the government as some of the reasons affecting exports.
“Seven key export segments such as textiles, apparel, gems and jewellery, diamonds, brass ware, handicraft and leather are already reeling under recessionary trends,” it said.
The industry body anticipates a shortfall of about $40 billion in exports this current fiscal.