India shall become $5 trillion economy in few years: Suresh Prabhu

Commerce and Industry Minister Suresh Prabhu on Thursday exuded confidence that exports will gather momentum going forward as the economy is on course to double to $5 trillion and become the third largest in the world, over the next few years.

"Our economy shall grow from $2.5 trillion now to $5 trillion and it will become the third largest over the next few years. With such an economic growth, our international trade will also grow," Prabhu told World Trade Expo 2017 here in a video message.

Earlier this week, the American brokerage a Bank of America Merrill Lynch had said projected that India would overtake Japan to become the third largest economy in the world by 2028 as it expects the nominal GDP to clip at 10 per cent over the next one decade.

The report noted that at $2.26 billion the country has already overtaken Brazil and Russia to emerge as the second largest BRIC economy after China and is well on track to cross France and Britain to emerge as the world's fifth largest after Germany by 2019.

Last year the economy closed at $2.26 trillion. But the report did not quantify the size of the economy by 2028 when it would be the third largest after China and the US. At around $5 trillion, Japan is the third largest economy now.

"This expo is being held at a time when the economy is growing faster than before. I am sure this expo will help foreign countries understand India and its economy better in promoting trade," Prabhu said.

His statement comes two days after his ministry said exports dipped 1.12 per cent to $23bn in October and trade deficit ballooned, retreating from a six-month high growth in September as shipments of textiles, pharma, leather and gems and jewellery fell.

Imports, however, grew by 7.6 per cent to $37.11 billion in October from $34.5 billion in the year-ago month. Trade deficit widened to $14 billion from $11.13 billion in October 2016.

Cumulative exports during April-October rose an anemic 9.62 per cent to $170.28 billion, while imports grew almost three times faster at 22.21 per cent to $256.43 billion, leaving a trade deficit of $86.14 billion.

Addressing the event, MSME secretary Arun Kumar Panda expressed hope that trade expos like this will act as a unique platform to integrate the khadi and village industries, micro, and MSMEs in the global value chain.

Noting that around 60 million MSMEs contribute 90 per cent to industrial production, he said "it is time MSMEs look beyond the borders and showcase their skills and excellence to the global market.

The foreign trade policy aims to increase share of exports in world to 3.5 per cent from under 2 per cent, according to the commerce ministry.

"The commerce ministry has also highlighted the need to shift the focus to emerging sectors and promote the bottom 10 items in the list of exports," additional director general of foreign trade Sonia Sethi said.

Representatives from over 37 countries are participating in the expo. These countries account for 17 per cent of the country's total trade.