Thaindian News

New Delhi, Aug 29 (IANS) India’s exports, which surged almost 46 percent in the April-June quarter, are unlikely to be much impacted because of the US’ credit rating downgrade that has led to turmoil in the global markets, Minister of State for Commerce and Industry Jyotiraditya Scindia said Monday.

“The dowgrading of the US credit rating by the rating agency Standard & Poor’s appears unlikely by itself to have any significant impact on India’s exports,” Scindia said in a written reply in the Lok Sabha.

Standard & Poor’s Aug 5 downgraded the top notch AAA credit rating of the US government’s ability to pay back its creditors and investors to AA+. This is the first time US rating has been downgraded.

The minister, however, said any significant slowdown in the US and the European economies would negatively affect Indian exports.

“Some of the prevailing risk factors that exist include medium to long term scenario related to the US debt ceiling and budget and current account deficits,” he said.

The US share in total Indian exports declined to 8.98 percent in 2010-11 from 10.59 percent in the previous year, while the European Union countries share has increased from 16.98 percent in 2009-10 to 17.11 percent in 2010-11.

To reduce dependence on US and European markets, India is divesifying its markets with a special focus on Latin America, Africa, Asia and the Oceania region, the minister said.

India’s exports surged 46.45 percent at $29.21 billion in June as compared to $19.94 billion in the same month last year. During the first three months of the current fiscal, exports grew 45.71 percent to $79 billion, while imports increased 36.22 percent at $110.61 billion.