With the World Trade Organisation projecting world trade to grow by 4.7 per cent in 2014 and a slightly faster growth at 5.3 per cent in 2015, which is a 20-year average growth rate, the Federation of Indian Export Organisations has noted that this augurs well for India's exports.
While world trade grew by 7.35 per cent on an average between 2005 and 2013, India’s exports grew by 15.66 per cent on an average in the same period, according to the FIEO. However, since India recorded only a modest growth of about 4 per cent in 2013-14, it is necessary for the trade to look at a 15 per cent increase in exports, taking it to $360 billion in 2014-15, said the FIEO chief.
In the case of world trade, the growth per cent of 2014 is more than double of what was achieved in 2013 (2.2 per cent). In 2013, trade growth rate was slow due to a combination of flat import demand in developed economies and moderate import growth in developing economies. On the export side, both developed and developing economies only managed to record a small, positive increase.
The trade forecast for 2014 has been upgraded to 4.7 per cent from 4.5 per cent. In 2013, Asia recorded the fastest GDP growth at 4.2 per cent, which was almost equal to growth in the previous two years.
Responding to the revised forecast of increase in global trade in 2014 and in 2015, M Rafeeque Ahmed, President of the Federation of Indian Export Organisations (FIEO) has said that projected growth in global trade is a major positive and has been a key factor in driving India's exports.
On a rough estimate, India’s exports growth has been more than doubled the global trade growth. ``We should expect a minimum of 10 per cent increase in exports in 2014,'' said Ahmed.
He added that though manufacturing had declined by 0.7 per cent in the April 2013 to February 2014 period, it needed to be promoted at all cost. ``We have to see that the share of manufacturing in GDP increases continuously to touch 25 per cent by 2020. The new Foreign Trade Policy should initiate measures for competitive manufacturing in the country, both for augmenting exports and substituting imports,'' Ahmed added.
Incidentally, in 2013, exports of Asia grew faster than any other region, with a 4.6 per cent rise, followed by North America and Europe. However, India suffered a sharp drop of 2.9 per cent in its imports, due to its economic slowdown. Exports of India also fell short of the target of $325 billion in 2013-14, and touched $312 billion.