Indian exporters urged to diversify into new markets

September 21st, 2011 - 11:45 pm ICT by IANS  

Kolkata, Sep 21 (IANS) Indian exporters should try to diversify into new markets as another economic crisis is looming large in the US and Europe, an official said Wednesday.

“Start looking at new markets… go to Columbia and similar countries. Do not think that the world stops with the US and Europe. I think you need to diversify the markets. You need not to worry about crisis in Europe,” union Commerce Secretary Rahul Khullar said at a programme, organised by Federation of Indian Export Organisations and Export Promotion Council For EOUs and SEZs here.

This comes after the IMF trimmed India’s economic growth to 7.8 per cent for 2011, as against earlier forecast of 8.2 per cent.

On how the export front is doing right now during the current exchange rate volatility, Khullar said: “Export segment is doing fine… there is nothing to worry about. Export was $135 billion at the end of August, import was $189 billion. We are running a trade deficit of $55 billion. It is okay.”

“Though the growth may happen in exports, it may not be as high as the predicted 40 percent or so,” he said.

Stating that in the next three to six months one could see a fair amount of exchange-rate volatility, Khullar said: “Exporters should not get greedy or scared due to volatility in exchange rates.”

He said as exchange rates stabilise, all the uncertainties about the euro will come down.

He said unless something disastrous happened, interest rate should be down within an year as the rates were at the top of their cycle.

“Food price inflation will come down in another six months, while cost-push inflation will decline by some time next year,” he said.

Khullar also said the commerce ministry is set to come up with a set of draft rules within two to three weeks for public discussion in an effort to bring timely changes to the Special Economic Act of 2005.

“There needs to be a change in the act, rules and policies followed in SEZs. Moreover, the minimum land requirement will also be relooked, as land is a major issue in many states,” he said.

Currently the area ceiling for multi-purpose SEZs is at 5,000 hectares.

Khullar said the states achieved notable economic growth where SEZs had been set up.

“You see Tamil Nadu, Gujarat, Maharashtra and Karnataka… Wherever SEZ have been set up, the areas have grown rapidly. Wage rate and employment increased in those areas,” he added.

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