India’s exports will not be able to achieve the target of USD 325 billion in the current fiscal and will fall short by about USD 10 billion, FIEO on Wednesday said.
“Domestic factors like declining manufacturing growth and slow improvement in the global demand are the main reasons for slow growth in the country’s exports.
“We will not be able to achieve the USD 325 billion exports target,” Federation of Indian Exports Organisation (FIEO) President Rafeeq Ahmed said.
The country’s merchandise exports would touch USD 312-315 billion by the end of this fiscal, ending March 31.
During April-January, exports grew by 5.71 percent to USD 257 billion, while imports dipped by 7.81 percent to USD 377 billion. The trade deficit was about USD 119 billion.
In the remaining two months (February and March), the country requires about USD 70 billion to reach the target.
Finance Minister P Chidambaram in the Interim Budget speech has said that India’s exports are expected to grow by 6.3 per cent to USD 326 billion during the current fiscal.
In 2012-13, the outbound shipments declined by 1.8 percent to USD 300.4 billion.
Ahmed said that liquidity is a big issue for exports and pending claims of refund of service tax, duty drawback, rebate claims and VAT are affecting exports.
“The government should not fix annual targets for exports. We should fix a target for five years and work accordingly,” he added.
FIEO is working on a paper for the new Foreign Trade Policy for 2014-19.
“In the next two and a half months time, we will submit the paper with our recommendations to the new government. It will includes measures which should be taken up to boost exports,” Ahmed said.
There is an urgent need to enhance investments in building infrastructure such as roads and ports, he said.
“Inadequate infrastructure is impacting exports. Transactions costs is very high,” he said, adding that the banks should provide credit at affordable rates to exporters.
The manufacturing sector, which constitutes over 75 per cent of the index, declined by 1.6 percent in December, as against a contraction of 0.8 per cent in the year-ago period.