Export growth in the current financial year is likely to slow down significantly to 10 per cent, as against the last year’s growth of 29.6 per cent, due to the ongoing global financial crisis that has hit demand and commodity prices, Commerce Secretary Gopal K Pillai said at a Ficci function on Friday.
The government, he said, would respond to the emerging situation and is planning to increase the duty drawback rates, which allow exporters to claim back taxes paid on items used to manufacture products for exports.
The rates are usually fixed as a percentage of export price and a higher rate would help exporters pay less taxes.
“I feel the worst period may come by March-April next year,” said Pillai, referring to the global financial crisis.
According to estimates of the Directorate General of Foreign Trade, exports in October shrunk 14 per cent to $12.8 billion from $14.6 billion in the same month last year. “If this rate of fall in growth continues, at the end of the year the growth rate will be just 10 per cent,” said Pillai.
The official review of the export target ($200 billion in 2008-09) by the commerce ministry will be done next month.
