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The government on Thursday said it is essential to improve infrastructure and reduce transaction cost to help India double its exports by 2014 in the wake of global slowdown.
The external environment is not conducive especially in the EU and the US and the next two years are going to be difficult for Indian exporters, said Mr Rahul Khullar, Commerce Secretary.
The Commerce Ministry has come out with a strategy paper aimed at doubling India’s exports to $450 billion in the next three years and laying out a road map for the future of exports.
However, the worsening demand situation in the developed markets has started impacting the country’s shipments.
“The external environment is not good and is unlikely to get better in the near future. Through 2012, what you are going to see is cutbacks in government expenditure, exchange rate fluctuations and financial sector problems.
“This means the external demand is not going to be conducive,” Mr Khullar said during an Assocham function here.
He said in order to boost the country’s exports there is an urgent “need to fix domestic problems like rail and port infrastructure, road connectivity and freight charges“.
“If you want your exports to grow, you have to figure out what you are doing wrong domestically because you cannot fix global problems. Things like reducing cost of doing business in India will help in gaining competitiveness (in the global market),” the secretary added.
From a peak of 82 per cent in July, India’s export growth has slipped to 44.25 per cent in August, 36.36 per cent in September and 10.8 per cent in October.
Transaction cost in India is about 8-10 per cent of the total exports which is around $16—18 billion annually.
An average cost to an Indian exporter on account of transaction cost has been estimated at a level of $945 per container as compared to $460 in China, $450 in Malaysia and $625 in Vietnam.
Expressing optimism over achieving the exports target of $450 billion by 2013—14, he said that both the government and the exporters need to work together.
In strong words he urged the exporters to explore new markets other then the traditional ones - the US and Europe - like Latin America and Africa to boost shipments.
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