The Hindu Business Line : `Export target will be met despite slow growth in Oct'

The apparent slowdown in export growth in October 2006 is nothing but a month-to-month "small fluctuation" and "we are quite confident of achieving the export target of $ 125 to 130 billion by the end of the current fiscal, the Commerce Secretary, Mr Gopal K. Pillai, said.

Mr Pillai is quite bullish that the medium-term export target of $150 billion (2004-09) could be achieved ahead of the schedule with "our primary focus currently on reducing transaction cost to trade and industry". He said that State level duties such as VAT and octroi needed to be sorted out so that exporters really get competitive.

"In a globally competitive environment when other countries are giving direct tax concessions, you will lose markets if you do not give direct tax concessions," he told Business Line, adding that electronic hardware was an instance in point.

Pare transaction costs

Mr Pillai said that even as the effort has been to pare transaction costs, the infrastructure deficit in areas such as roads, ports, airports poses "trouble". He said that efforts are under way to bring public-private partnerships in areas such as roads, airports and other basic infrastructure. He pointed out that even as the country was importing wheat, this has blocked the ports and exports are getting affected. "Everything has an effect".

Referring to the reasons for slowdown in exports, he said that gem and jewellery exports from India have been facing increasing competition and with various mining restrictions in Africa from the so-called "conflict diamond" zones, import of diamond was getting difficult for value-addition and re-export.

Referring to the reported withdrawal of some IT companies from SEZs, Mr Pillai recalled that he had earlier stated that there would be 25 per cent dropout from the approved units for various reasons. He said in the new SEZs such as the one in Sriperumbudur, the objective of the Government was to reduce the transaction cost to exporters by cutting down cargo dwell-time in airports from the current three days to just four hours by next year.

SEZs hiring more women

Mr Pillai said that most of the functioning SEZs have employed 70 to 80 per cent women particularly from backward communities to adapt affirmative action on their own to transform the lives of rural women by imparting them skills in assembling cell phone handset or stitching sports or men shoes.

On the possibility of WTO talks resumption, Mr Pillai said, "it all depends on the US. They have to reduce their domestic support on agriculture. Until their agricultural subsidy is reduced, there is no possibility of any momentum in the WTO" talks. He said that what the US has tabled so far was nothing since they said that they be permitted to give more subsidy at the end of the five year period and "this sort of proposal will not help" in breaking the logjam in the stalled multilateral trade negotiations.