Economy

Focus must be on raising merchandise exports

Our Bureau New Delhi | Updated on July 09, 2014

India’s share in world merchandise exports increased from 0.5 per cent in 1999 to only 1.7 per cent in 2013.   -  The Hindu Business Line

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Electronic, electrical, engineering goods and textiles are the key

India’s exports need to grow 30 per cent annually for the next five years to raise the country’s share in global merchandise exports to a “respectable” 4 per cent, the Economic Survey for 2013-14 has suggested.

Focussing on export of the three Es — electronic, electrical and engineering — and some textile items could lead to greater dividends for India, the Survey proposed.

Product diversification

“India’s share in world merchandise exports increased from 0.5 per cent in 1999 to only 1.7 per cent in 2013, whereas China’s share increased from 1.8 per cent to 11.8 per cent during the same period,” the Survey pointed out.

Product diversification, building export infrastructure, focussing on useful free trade agreements, addressing inverted duty structure, rationalising export promotion schemes and trade facilitation measures are some of the steps India can take to strengthen exports, the Survey added. While exports in the first two months of the current fiscal have been encouraging, the Economic Survey warned that the outlook for the rest of the year was still fragile as world trade growth seemed wobbly. Signals from India’s service exports are mixed as IT is expected to do well, while shipping, transport, port and insurance-related services could suffer.

CAD impact

Higher exports not only translate into higher manufacturing and more jobs, they also play a crucial role in keeping the current account deficit (CAD) — excess of imports of goods, services and transfers over export of goods, services and transfers — in check and the balance of payments healthy.

An export growth of 30 per cent for the next five years, which could ease CAD substantially, would be a tough order as exports have been severely hit in the last five years due to the global slowdown.

Last year, exports posted a growth of 4.1 per cent to $312.2 billion, but missed the target of $325 billion.

Published on July 09, 2014

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