New Delhi: India’s exports will surpass the $200 billion target for the current fiscal and the gradual roll-back of stimulus measures is not likely to impact growth of the country’s overseas shipments, according to the pre-Budget Economic Survey.
It said the outlook for India’s trade has brightened with good growth of 29.5% during the April-December, 2010-11, period. Imports grew by 19% during the period.
“Current indications are that India will not only achieve the target of $200 billion but surpass it in 2010-11... The gradual withdrawal of stimulus measures by India and other countries is not likely to adversely affect India’s rising exports,” the survey said.
However, it said there is a need to remain vigilant about any fallout from the financial turbulence in the euro zone and the new disturbances in the Middle East.
It said that the slowdown in import growth from October, 2010, and a rise in exports from November, 2010, has helped bridge the trade gap.
“Although the concerns on the trade deficit front have subsided with a pickup in exports in the last five months and slowdown in imports in the last three months of 2010-11 (April-December), the situation needs to be watched,” it said.
Also, the deceleration in the net surplus of services trade is a “cause of worry” on the “current account deficit”, it added.
Further, it said that the rising inflation could erode agricultural exports.
“This has necessitated the formation of a systematic inflation-tackling mechanism with early warning systems, rather than resorting to ad hoc policy measures,” the survey said.
Hit hard by the global slump in demand in 2008, the government had provided several stimulus measures to boost the country’s exports, including a 2% interest subsidy, tax benefits and many market and product-linked incentives.
After the exports starts reviving, the government in the last Budget had withdrawn some benefits.
During the April-December period of the current fiscal, outbound shipments grew by 29.5% to $164.7 billion.
Imports during April-December, 2010, stood at $246.72 billion, as against $207.31 billion over the same period last year.
The trade deficit during April-December stood at $82 billion, marginally higher than $80.13 billion in the corresponding period last fiscal.