India's exports declined 4.7 per cent to $176.5 billion in 2009-10 owing to a demand vacuum from traditional markets, setting the government thinking on sops to sectors struggling to find buyers.
"The bad news is that exports did not come up to the target of last year. And the good news is that we are not far (from 2008-09 export performance)," Commerce Secretary Rahul Khullar told reporters here. Exports in 2008-09 was $185.3 billion.
Although exports have rallied for five straight months, growing by 54.1 per cent to $19.9 billion in March, Khullar said: "Exports are not yet out of the woods."
The looming economic crisis in Europe and the continued bad performance of several sectors could have adverse impact on overseas shipments in the coming months, Khullar cautioned.
"We will be tweaking the policy of some of the incentives, where required, giving more support to sectors which are still hurting and in deep red," Commerce and Industry Minister Anand Sharma said.
Sectors like engineering, readymade garments, leather, carpets, oilmeals, petroleum products and gems and jewelery, which together account for about 70 per cent of India's exports, either showed no growth or contraction and has become a cause of concern for the government.
India has set an export target of $200 billion for the current fiscal.
The government is conducting a sectoral review and is likely to complete the process by July.
The country's exports fell for 13 months in a row, starting October 2008, due to the global slump in demand. Exports turned positive for the first time since the slowdown in November 2009 and continues to remain in positive zone.
However, the significant increase in March is owing to a low base impact.
Meanwhile, the imports bill for 2009-10 has been estimated at $278.7 billion, down 8.2 per cent from a year ago, leaving a trade deficit (gap between exports and imports) of $102 billion.
A senior official indicated that the government may take away incentives from the sectors which were showing growth and distribute among those which are yet to pick up.
Khullar cautioned exporters against the impact of the Greece debt crisis and its subsequent fallout in Europe, the traditional market for Indian merchandise.
"It (looming crisis in Europe) was never factored in earlier," he said, adding that the Commerce Ministry has no further room for additional fiscal incentives.
