India's net exports are not doing well even as the global economy is on the recovery path, Bibek Debroy, the head of Economic Advisory Council to the Prime Minister (EAC-PM) and Niti Aayog Member, said today.
Debroy further highlighted that India is facing a dilemma from the point of view of pushing exports, as exporters would like exchange rate to depreciate, however exchange rate might not depreciate as much as exporters want because of capital inflows.
"Net exports is not doing well. During high growth years, net exports performed much better ... That world economy has not been doing that bad," he said at an event organised by industry body FICCI.
Debroy also noted that ideally the central bank should intervene in the market but intervention by the RBI in the market is not without its cost side.
Exports grew by 4.5 per cent in February, the lowest expansion in the last four months, to USD 25.8 billion as shipments of engineering, textiles and gems and jewellery declined while trade deficit narrowed to a five-month low of USD 12 billion.
Stating that India's position has been that the country is in favour of multilateral trading system, the chairman of EAC-PM insisted as long as India's import duties are below the bound rates, it can increase import duties.
Debroy said that some of India's tariff rates are misaligned and the country has signed plethora of free trade agreements.
Noting that traditionally, Commerce Ministry and Ministry of External Affairs (MEA) have worked in silos, he said, "this is first time, they have started working together."