Export target will fall short by $40 bn, warns industryNovember 9th, 2008 - 7:31 pm ICT by IANS
!– Imagr –New Delhi, Nov 9 (IANS) Indian exports are likely to fall short of the targeted $200 billion in 2008-09 by about 20 percent, says a report by an industry lobby. According to the Associated Chambers of Commerce and Industry of India (Assocham), seven key export segments - textiles, apparel, gems and jewellery, diamonds, brassware, handicraft and leather - are reeling under recessionary trends, which will affect the overall exports figures.
These sectors put together constitute the highest volumes in India’s total exports to economies such as the US, the European Union and ASEAN countries.
“Naturally, these sectors will not be able to generate their previous export momentum and Assocham anticipates a minimum of $40 billion exports shortfall for current fiscal,” the report said.
India’s foreign trade policy for the current fiscal has fixed export targets for 2008-09 at $200 billion.
As the exports are to high-value markets, Assocham has felt pessimistic about the export scenario.
Additionally, the report said, Indian exports will also be hit in 2008-09 by rising ocean freight rates, weakening rupee-dollar exchange rate, and deepening recession in the US and Europe.
Other factors that have eroded competitiveness of Indian exports are rising input costs and the poor power and infrastructure that has hit the manufacturing sector, the report says.
India lags behind in logistics, and as a result, the transaction cost of exports has risen by about 20 percent, the report says quoting “latest estimates”.
All these factors have also rendered Indian exports non-competitive as India is facing stiff competition not only from China, but also neighbours like Bangladesh, Sri Lanka, Pakistan and Bhutan.
As a result, India’s traditional exports have suffered and threatens to continue until exporters adopt modern technology, concludes the Assocham analysis.
The report, however, adds that exports that would have reasonably good in pharmaceutical and chemicals, heavy engineering, and metal and marine products, besides fast moving consumer goods.
These sectors continue to command demand not only in the domestic market but also in the Middle East, Sotuh-East Asia and Africa.
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