ASSOCHAM says exports likely to suffer by 10% in 2010-2011.

New Delhi: The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has predicted a shortfall of close to 10 per cent in exports target for current fiscal due to slowdown in exports growth rate, which fell from 36.2 per cent in April to 35.1 per cent in May, 30.4 in June and that of 13.2 per cent in July this year and the trend is unlikely to witness a u-turn.

The chamber is of the view that India’s exports would thus be around $US 180 billion as against the target level of $US 200 billion by the end 2010-2011, since slump in export growth rate has started becoming extremely pronounced and is likely to continue for remaining period of on-going fiscal.

This is because developing countries have already gone in for fiscal consolidation as their economies commenced partial roll back of stimulus packages, impact of which will fall on India’s export proceeds in current fiscal, said Secretary General, ASSOCHAM, Mr. D.S. Rawat.

As a result of fiscal consolidation, India’s exports which grew at the rate of 32.6 per cent in April 2010, it fell to 35.1 per cent in the following month before coming down to a level of 30.4 per cent in June, which slipped at abysmally lower level of 13.2 per cent in July this year and reversal trend will continue with some improvements here and there in remaining months of current fiscal, amounting severe sinkage of export proceeds arriving at $US 180 billion by March 31st, 2011, said Mr. Rawat.

The ASSOCHAM, however, stated that USA will remain a leading market for Indian traditional goods and services even in current fiscal, the country which suffered the maximum onslaught of global financial turmoil between September 2007 until 2009. This is because US economy has gradually started coming out of recessionary moods in which it will have lot of space for Indian products especially in the traditional segments which includes gems & jewellery, textiles, components, tea, spices and brassware and other handicrafts.

The ASSOCHAM is of the view that Indian exports will suffer a good deal of beatings in European Union (EU) in which countries like Spain, Italy, Portugal, Germany are already in for major fiscal consolidation. This has put a serious question for demand of Indian products in these countries.

Estimates reveal that close to $US 20 billion of export proceeds are absorbed in aforesaid countries, including other European nations in which slump in demand and consumption are being closely followed.

Mr. Rawat said that major hope for Indian exports, retaining their edge will stay in Latin American countries and African continent, since India has described them as focused region for domestic exports. In totality, it is estimated that exports will stay stagnant in current fiscal and severely dent the external engagements of the country thereby compromising India to remain content with the loss of foreign exchange inflows.

The chamber has suggested that India needs to map out its technological gaps and invest heavily on R&D so that it makes products and sells goods & services of supreme quality so that Indian products can create space for themselves. Investment in R&D in India is just negligible, as a result it still imports equipments and processes for setting up power plants, oil & gas facilities, telecommunication infrastructure, engineering plants and so on and so forth.

Source : orissadiary.com