The five-year Foreign Trade Policy (FTP) unveiled in 2009 made due allowance for the global economic turbulence and uncertain overseas markets when it said the Government would take stock of the situation by March 31, 2011 after the short-term shock worked itself out.

After a disastrous dip of close to 35 per cent in 2009-10 in the aftermath of the global financial turmoil, India's exports in the fiscal 2010-11 is set to overshoot the target of $200 billion. Exports have already crossed $208 billion in the first 11 months of this fiscal.

In order to get a perspective of the issues plaguing foreign trade and what the Commerce Ministry as a nodal agency is doing, Business Line spoke to the Commerce Secretary, Dr Rahul Khullar, in his Udyog Bhavan office.

Known for responding to any question with candour and clarity, Dr Khullar gave the full credit to the country's exporters for riding the choppy overseas waters and enhancing exports to a higher level.

Following are the excerpts from the interview of the Commerce Secretary, Dr Khullar.How do you account for the salutary performance of the Indian exporters in the just-ended fiscal ?

When we formulated the FTP we were not sure when the developed country markets would turn around. So we told exporters instead to start diversifying their products and markets through a strategic shift in policy. The Finance Ministry helped us enormously in 2009-10 and 2010-11 by generously providing us with assistance for export promotion schemes.

The expansion we were able to undertake both for the Focus Market Scheme, the Focus Market Scheme as well as the Focus-linked Market/Product schemes were all well-timed in promoting exports of key sectors to certain areas. Last year chemicals and engineering did exceedingly well. So part of the strategy is paying off.

Second, the country continued in its growth path and our exports found markets and retained their competitive edge. Third, there is some revival in the American economy and Europe except in the peripheral countries such as Greece, Ireland and Portugal.

Whenever there was economic trouble over the last year or two, these peripheral markets were not critically important to us. The markets which were critically important to us in Europe and in America continued to prosper. Recovery in the right places at the right time was good luck.

Based on the combination of factors, how do you devise your strategy for the next two to three years?

Well, the Ministry would be releasing a strategy paper in two weeks' time. We will be doing this for the first time because exporters are facing a big problem for which something needs to be done. The strategy paper would lay out what we should get done in the next three years. We will not set the target of export for the current fiscal unless we get firm numbers for March because there were some delays as the computer system during some days in March was not accessing data. My guess is exports during 2010-11 would be somewhere in the range of $225-230 billion.

Is lifting of export ban on wheat in the offing?

The Commerce Ministry has been saying that we have large stocks of wheat with even larger stocks coming in due to the anticipated bumper Rabi crop which will further push up procurement. If you are already carrying surplus stocks and you are getting a new bumper crop with incentives to farmers for higher procurement, you may end up having a surplus and a sensible thing to do is to export. So the ball is in the Government's court, but our perspective is that there is no real objection to the export of some amount of wheat but the question is what amount and when? Nobody is calling for opening the export window indiscriminately.

On the Commerce Secretary level talks in Islamabad on April 27-28?

As of now, there is no fixed agenda as it is an unstructured meeting. The advantage is that you don't necessarily have to limit yourself to one set of issues. Second, you can leave out things which seem a little more difficult to get done and focus on things which can get done quickly.

It is the first meeting at the Commerce Secretary levels after many years so you do not want to raise hopes high.

At the same time we have to be constructive and put our best foot forward to see how we can engage. It is also to our mutual advantage to expand trade and develop business interests across both sides. It is one more component of much larger dialogue process currently under way on several fronts.

> geeyes@thehindu.co.in

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