The country’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 the 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 per cent during April-December, 2010-11. Imports grew by 19 per cent 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 West Asia.
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 pick-up 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, the Survey 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,” it 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 per cent interest subsidy, tax benefits and many market and product-linked incentives. After the exports start reviving, the Government in the last Budget had withdrawn some benefits.
During April-December of the current fiscal, outbound shipments grew by 29.5 per cent to $164.7 billion. Imports during April-December, stood at $246.72 billion 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.