Downside risks to India's exports are limited despite slowdown in the US and European economies since the country's exports to the developed markets are not as important now as in the past, a Goldman Sachs report has said.
The report which expects India's exports to reach $198 billion, a shade lower than the official target of $200 billion, said nearly two-third of the country's exports now go to the non-US, non-EU markets especially to China, the Middle East and Africa.
"In the face of a slowdown in demand from the US and EU, traditionally, India's largest export markets, concerns have now arisen on how deeply will India exports be affected. ...We argue that even though some moderation in exports growth is inevitable, the downside is limited," the report said.
It listed different reasons for remaining optimistic about India's global trade.
It said the country's fastest growing export products are resource intensive and commodity based — raw materials, iron ore, metals and refined petroleum — "which continue to see strong demand in the rest of the BRIC (Brazil, Russia, India and China)...".
Besides, exports will also be helped by a weaker rupee in 2008.
The rupee has depreciated 10 per cent year-to-date in nominal effective terms.
The falling trade barriers, including trade agreement with Asean, for which negotiations have been concluded, would help boost exports in the medium term.
The Goldman Sachs report said that the highest growth opportunities lie in high-skilled products on the one hand resource-intensive products on the other.
In the first four months of this fiscal exports showed a growth of 24.6 per cent rising to $59.19 billion.
