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G. Srinivasan

New Delhi, Aug 31 The country’s exports during the first four months of the current fiscal (April to July) are likely to have cranked up at a faster pace of above 35 per cent in rupee terms and above 25 per cent in dollar terms when the provisional figures are released here on Monday.

Thanks to the rupee depreciation vis-À-vis the US dollar that has begun in the current fiscal, Indian exports in rupee terms have been showing a salutary trend, the Commerce Secretary, Mr Gopal K. Pillai, told Business Line.

He said engineering goods, auto companies and information technology companies would do well because of rupee depreciation.

However, he said, there is a definite slowdown in the US market where out of Rs 100 of exports, Rs 20 came from the US and this would now come down to Rs 15.

But this has been made good by diversifying export destination to Latin America, South East Asia and Asean region by Indian exporters in recent period.

Mr Pillai expects pharmaceutical and engineering goods would partly make up the moderation in the export of petroleum products in the wake of recent fall in global crude prices even as petroleum exports from India currently accountfor 10 to 12 per cent of total exports.

On the persistent plea of exporters for retention of the export credit subvention extended to a range of exporters when rupee was appreciating in 2007, Mr Pillai said the Commerce Ministry has recommended for its continuation beyond September 2008 and the Ministry of Textiles is preparing a note to the Cabinet Committee on Economic Affairs (CCEA) explaining its crucial importance to textile exporters.

Asked about the recent wrap-up of the India-Asean FTA in Singapore, Mr Pillai said more than economic benefits, the FTA would ensure this has also a political advantage for India in linking itself starting from Myanmar to the entire East Asia.

Moreover, he said, Asean has an FTA with Japan, China and Korea and is due to launch one with New Zealand and Australia. Once the FTAs of Asean with these major countries in Asia are in place, India’s engagement with Asean market would disappear if there is no India-Asean FTA. He said, “while every other country enjoying FTA with Asean would pay zero duty, you will be paying MFN duty” and hence, in order to maintain “our market share” it would be in the fitness of things that India also entered into an FTA with Asean.

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