The global trade situation remains precarious and in order to boost India’s exports, the government is looking beyond the country’s traditional overseas markets such as the US and the Euro zone, Commerce secretary S R Rao said.
He said the trade deficit of India was a cause of concern, but things were expected to be better from January as the measures taken by the government, including fiscal steps to boost exports, would start paying off. In December, there was a marginal reduction in deficit, Rao added. Federation of Indian Export Organisations President Rafeeq Ahmed said the trade deficit for the December quarter will be between $40-$45 billion.
The deficit for October and November totalled nearly $40 billion. The government will release the trade data for December on January 11.
The country’s April-November exports were at $189 billion, down 5.9 per cent year-on-year, while imports during the period stood at $318.7 billion, up 6.35.
The widening trade imbalance is having an adverse effect on the country’s current account deficit (CAD), which stood at 5.4 per cent in the September quarter, much above the comfort zone of 2.5 per cent.
CAD is the difference between a country’s import and exports of goods, services and transfers.
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Rao said the World Trade Organization had projected a growth of 4.5 per cent in world trade for 2012 and scaled it down thrice. The world trade is in great recession and the forecast for current year is not bright. In order to tackle the problem, the government is looking beyond the US and the Euro zone to find new markets for exports, he added.
For instance, he said the government was planning to double marine exports from $3.5 billion to $7 billion by 2015 and looking at new markets in Africa, West Asia and other countries. The secretary also said target could not be reached by the government alone and they had to partner with public. "That’s why we are in a process of devising schemes to ramp up the PPP (public-private partnership) model".
Expressing concern about the falling marine exports, Rao said: "Per kilogram realisation of marine exports dropped seven-eight per cent in terms of value, while in terms of quantity, it has increased during the current fiscal." He attributed the drop mainly to dollar fluctuation.