Merchandise exports to cross $200b in FY11.

India’s merchandise exports will exceed over $ 200 billion in the current financial year,

according to KT Chacko, director, Indian Institute of Foreign Trade. This may happen at a time when global trade is expected to grow by two to three per cent this year. Chacko told Financial Chronicle that exports growth outlook for the year looked positive. However, Indian exporters will be impacted significantly if the rupee appreciates further.

Actual exports in 2009-10 may not have crossed $ 170 billion though the targets were set at $ 200 billion for the entire financial year. Actual exports performance fell short despite the fact that recovery in the global markets and exports turning positive was witnessed beginning November 2009. As per official data, during April 2009 – February 2010, exports were reported to be $ 153 billion. Merchandise exports data for the full financial year is yet to be compiled by the commerce and industry ministry.

“This year we will achieve sound growth. Full impact of economic slowdown was felt in the previous financial year. But, despite that our exports were valued at $ 160-165 billion. Most of the sectors now have moved back into positive territory,” said Chacko.

But, India must keep an eye on appreciating rupee. “Situation is not alarming right now. But, it will impact exporters as their profitability is directly related to the currency value. It will add to injury as exports have not fully recovered from economic slump,” he cautioned. The Indian rupee has appreciated by 18 per cent over last 12 months.

Chacko added that sectors like gems and jewelery, handicrafts and handlooms do not constitute a major chunk of overall exports but they are still important sectors because it is reflective of the positive mood of buyers. “These items are not essential commodities but they reflect that the buyer is comfortable in spending money in non-essential items as well,” he added.

On being asked about proposed border tax by developed countries like the US on imports from developing countries like India and China who fail to comply with carbon emission norms, Chacko said India’s stand on the issue is very clear. “Anything related to restriction on trade has to come under the norms of WTO. Trade as a trigger for any purpose should only be done by WTO. We will follow WTO mandate,” said Chacko.

Source : mydigitalfc.com