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New Delhi: Smiles returned to the faces of Indian exporters in 2010 after nearly 12 months of pain suffered by them due to recession in advanced economies, reports PTI.
October 2009 saw the tide turn in favour of Indian exporters and the situation kept getting better and better with each passing month of 2010.
“If you look at all the big ticket items on our exports—whichever you want to pick up—cumulatively, all of them had good growth rate for the April-November period,” commerce secretary Rahul Khullar said, summing up what he called the “real interesting story” of fiscal 2010-11.
So much so the value of the country's outbound goods consignment this fiscal is expected to far exceed the target of $200 billion. It was $179 billion in the previous year.
“Indian exports may reach a new milestone of $220 billion this fiscal, increasing the country’s share in the world trade,” Federation of Indian Export Organisations president A Sakthivel said.
Since things had gone so bad between October 2008 and May 2009 under the impact of demand-recession in all the major markets for Indian merchandise, the initial phase of recovery was seen as no great shakes because it came on the back of a low base of annual comparison.
But right from the first quarter of the fiscal 2010-11, the actual recovery was visible, helped by a turnaround in the US and European markets as also increased global prices in commodities.
Thanks to demand pick-up in the western stores and production facilities, India’s merchandise shipments went up by 26.7% to $140.3 billion between April-November, according to the official data.
In fact, as Mr Khullar put it, it was for the first time over a long period that the pace of growth in exports was faster than imports, which expanded by 24% in the eight months of the FY’11.
Consequent to exports doing well, worries on the balance of trade front have receded. The trade gap (difference between export and import) for the April-November period was $81.7 billion. At this rate, it could go anywhere between $120-$135 billion depending on the global prices of crude, which account for about 30% of the country's import bill.
From the point of view of realisations, engineering, gems and jewellery and petroleum products were the biggest contributors to the Indian export basket. The good news is that all the three have clocked huge growth in the first eight months of the fiscal.
Between April and November, engineering exports were up 50%, gems and jewellery 16% and petroleum products 41%.
Then there are sectors which do not bring in much in terms of value but are crucial for employment. These include sectors like carpet and leather, which have also shown smart growth.
While exports are doing well, there are some worries around the debt crisis in some of the European countries such as Ireland, Portugal and Spain, which may have contagion effect on rest of the continent.
Individually, these countries may not have much relevance to India, but Europe as a whole is relevant as it accounts for nearly 36% of Indian exports.
“Unless there is robust recovery in Europe, immediately we cannot shift our market and improve international trade scenario,” finance minister Pranab Mukherjee said recently.
On policy level, 2010 saw the government taking steps to increase India’s exports (imports too will increase) by entering into market opening free trade pacts with not only countries but with regions as a whole.
During the year, India entered into free trade agreements with South Korea and the 10-nation ASEAN and finalised agreements with Malaysia and Japan.
India and the 27-nation EU gave an impetus to their ongoing negotiations for a comprehensive trade pact, as leaders from the two sides called for concluding the agreement early next year.