'Inflation control should not be at the cost of exports'

Q&A: Kamal Nath

Commerce Minister Kamal Nath, after unveiling the final Annual Supplement to the Foreign Trade Policy 2004-09, said the export target of $200 billion for 2008-2009 was very much achievable: Excerpts:

This is the last year of the Foreign Trade Policy (FTP). How do you rate its success?

There is no reason to worry. We have exceeded our expectations. When we announced the FTP in 2004, our exports were at $63 billion. Today (in 2007-08), they have crossed $155 billion.

We have been experiencing a cumulative annual growth rate of 23 per cent. I would say we achieved in four years what we had targeted for five years. I am sure we are going to achieve the $200-billion export target in 2008-09.

Don't you think the $200-billion target is a little too ambitious given the current macro-economic scenario?

The country's economic situation is not gloomy at all. Similar doubts were expressed about last year's export target. The $200-billion target will be achieved.

Will inflation undo your export promotion efforts?

We have to make sure that inflation control does not happen at the cost of exports. Inflation is more of a supply management issue. The production of non-essential items has gone down. States should handle this supply-demand mismatch.

The government has banned the export of a few items to curb inflation of essential commodities. But I believe other products will pick up. We are expanding the product basket for exports and introducing new schemes for sustained export growth.

For instance, our apparel exports to the US and Europe are significant in size. However, there is no market for Indian apparels in Japan. We are going to provide them to walk that extra mile.

How successful have you been in ending the practice of "exporting taxes"?

We know that several states are not refunding domestic taxes to exporters. The government is finalising a scheme for rebating these taxes.