India is unlikely to maintain export growth of 21 per cent this fiscal and may find it difficult to meet overseas shipment targets against the backdrop of continuing euro-zone debt crisis, exporters industry body Fieo said today.
The country's shipments this year may not even touch USD 350 billion and the government's target for USD 500 billion by 2014-15 too looks impossible because of the present global challenges, Federation of Indian Export Organisations (Fieo) President Rafeeq Ahmed said.
He said India's exports to Latin America and Africa are also facing difficulty due to logistics problem.
"The outlook for the current fiscal looks bleak, a growth of even 15-16 per cent would be very difficult to achieve with slowdown in world demand owing to euro crisis and decrease in trade exports to Latin America and Africa," Ahmed told PTI.
The country's merchandise exports grew by 21 per cent year-on-year in 2011-12, to USD 303.7 billion. Ahmed said India's share of exports in Latin America and Africa has gone down to 12 per cent recently owing to difficulty in logistics, including shipping of commodities to these regions.
"The exports growth will not be more than five-six per cent in the first six month of the current fiscal," Ahmed said, adding that ASEAN and Asian markets remain the only hope for India which continue to be a major destination of the country's exports.
He added that during such difficult times, there is an urgent need for an affordable export credit at internationally comparable interest rates to the exporters. The cost of credit now exceeds 12 per cent whereas benchmark rates in most countries are in the range of 2-6 per cent, Ahmed said, adding that there is also a need to focus on MSME exporters which are facing problems due to fluctuation in the rupee value.
The MSME sector contributes about 40 per cent to the country's exports. Ahmed has asked the exporters to explore the Chinese market to help bridge the widening trade deficit.
India's trade deficit last fiscal jumped at a record high of USD 185 billion. "We need to encourage Indian Traders to do business there (in China). But we need the government support for the purpose," Ahmed said.
India's trade deficit with China was around USD 24 billion in 2010-11.
