India’s exports dropped 4.7 percent in the fiscal year 2009/10 as the global slowdown sapped demand, but Asia’s third-largest economy is targeting close to 15 percent export growth this year, officials said.
While India has returned to positive monthly export growth, a top trade official warned the sector faced a degree of uncertainty in the current fiscal year, especially because of the debt crisis unfolding in Europe, a key market.
India’s exports have notched positive growth for the past five months after 13 straight months of decline, helped by a low base effect and fiscal aid from the federal government, as well as signs of a rebound in global trade flows in 2010.
India’s March exports alone surged 54 percent year-on-year to $19.9 billion. India’s Trade Minister Anand Sharma said the ministry has set a target to grow its 2010/11 merchandise goods exports by nearly 15 percent to $200 billion.
The World Trade Organization said in March that world commerce in merchandise goods is expected to grow by 9.5 percent this year on the back of economic recovery.
“The broad-based and strong recovery continues, both in exports and I would say for industrial production too,” Sharma told reporters, though adding, “there are many sectors which continue to hurt badly.”
India’s 2009/10 exports dropped 4.7 percent year-on-year to $176.5 billion, Trade Secretary Rahul Khullar said, while imports fell by 8.2 percent in the financial year to $278.7 billion.
India’s trade deficit for the 2009/10 fiscal year stood at $102 billion.
“On exports, I think we did pretty damn well,” Khullar, a top bureaucrat, told reporters after a press conference led by Sharma. “Are we out of the woods? No.”
“What’s happening in Europe, that has become an imponderable which we had never factored into our equations earlier,” Khullar added.
Khullar said the federal government would not offer as much assistance to Indian exporters as it did last year, even though some sectors such as engineering goods and handicrafts continue to struggle or remain stagnant.
The trade minister said the steady strengthening of the rupee versus dollar has not adversely affected Indian exports. The rupee has appreciated by 4.4 percent so far in 2010.
Rupee gains have been spurred by foreign capital flows into Indian stocks and the central bank has cautioned that it may have to intervene in case of a surge in capital inflows.
Net portfolio investments so far this year stood at around $6.2 billion, on top of the record $17.5 billion that entered the market in 2009. A Reuters poll in March forecast the rupee would appreciate to 43.5 at the end of India’s current fiscal year.
The Indian economy is seen growing at around 8.5 percent in the 2010/11 fiscal year. Industrial production grew an annual 15.1 percent in February. (Reuters)