Even as concerns are rising over the momentum of recovery in the developed countries, India is optimistic of achieving 15 per cent growth in exports in 2010-11, says Commerce Secretary Rahul Khullar in an interview with Nayanima Basu. Excerpts:
How will the measures announced in the annual supplement to the Foreign Trade Policy help in boosting the country’s exports?
First, there are a number of measures which affect export sectors as a whole. For instance, the Duty Entitlement Pass Book (DEPB) scheme has been extended till June 30, 2011. Two schemes — the zero-duty Export Promotion for Capital Goods (EPCG) and Status Holder Incentive Scheme — have been extended up to March 31, 2012, and their coverage has been expanded to include other sectors.
Second, a slew of incentives have been announced. A total of 135 products such as leather, handloom, handicrafts, silk carpets, toys and sports goods and bicycle parts will be eligible for 2 per cent bonus.
Third, there are a number of other measures which simplify processes for specific sectors such as handlooms, handicrafts and leather.
According to you, there will be a revenue forgone of Rs 1,050 crore due to the measures announced. Which of the measures will consume the most of this amount?
Expenditure voted by Parliament is money coming to the treasury which I am giving away. We are issuing scrips as incentives, which means we are forgoing revenue and that is not actually spending some amount. The package just on incentives is Rs 1,050 crore, the rest is extra.
Even if exports have been in the positive zone since November 2009, do you think it will be sustained because the recovery process has failed to pick up momentum in the US and EU?
I am aware that economic recovery in both the US and EU remains weak, almost fragile. It is also true that we are not out of the woods as yet. But I remain optimistic that we will be able to grow at about 15 per cent over the year and that should get us to our target of $200-billion for exports. There is good reason to believe that our strategy of market diversification and calibrated incentives will indeed get us through this rough patch.
Last week, you said that the low base had been wiped out and the growth in exports could slow down. Do you see export growth coming down to single digits or the measures you announced in FTP would help in preventing the fall?
For the past three months, I have consistently maintained that the heady days of 25-30 per cent per annum growth in our exports are over and that we must get used to lower growth rates. The new numbers vindicate that stand.
