India may lag far behind in achieving its export target of $350 billion for the current fiscal and what is more disturbing is that overseas shipment may not even reach last year’s level of a little over $300 billion, said Commerce and Industry Minister Anand Sharma on Friday.
“The trade deficit or the gap between exports and imports are also expected to widen up to $196 billion in the year ending March 31. It is very disturbing and challenging fact that we have not even reached where we were a year before,” said Sharma after the Board of Trade meeting.
Rising trade deficit is a bad news for an already widening current account deficit. It may even worsen the CAD and in turn, also exert an undue pressure on the rupee, which has depreciated 1.30 per cent against the dollar since this January, after having lost nearly eight per cent in all of 2012.
Sharma said a weak rupee would also not help Indian exporters, as importers who will also feel the pinch will ask for more discount. “The trade deficit was $182 billion in the first 11 months of this fiscal. It will definitely be between $193 billion and $196 billion in the current fiscal,” Sharma said, asking every institution involved in ensuring faster movement.
Sharma also said in current scenario of economic growth slowing down, it was much more difficult to work out the stimulus packages as availability of resources is constrained.
The Board of Trade meeting suggests steps to prepare the way for the annual supplement to the Foreign Trade Policy (2009-2014), expected to be unveiled in April. The meeting was chaired by Sharma and had representation from the ministries of Finance, External Affairs and Micro and Small and Medium Enterprises. Minister of State for Commerce D Purandeswari said, “It is time to take some serious long-term steps to sustain the growth in our exports and to achieve that we not only need to strengthen up our presence in the traditional markets, like the US and Europe, but we should also make our presence felt in non-traditional markets as well”.
According to Commerce Secretary S R Rao India needed to address the issues of the infrastructure sector that has been impacting foreign trade performance. The government is expected to unveil the annual the Foreign Trade Policy in the first week of April.