Continuing with the positive growth in the exports sector for the third consecutive month, India’s exports are likely to post an 8 per cent growth at $14 billion during January 2010 amid indications of a partial withdrawal of incentives provided in the stimulus packages.

“In January, we expect exports to be $14 billion. But you must be ready for some cut back,” Commerce Secretary Rahul Khullar told reporters here on Tuesday on the sidelines of a conference organised to release a study by Assocham on India-ASEAN FTA.

Exports, which came under severe pressure due to the global slowdown after October 2008, had aggregated a shade lower than $13 billion in January 2009. In the backdrop of exports moving in tandem with a smart economic recovery, Mr. Khullar asked exporters and the industry to expect partial withdrawal of fiscal stimulus.

Mr. Khullar’s remarks came a day after the Union Commerce and Industry Minister, Anand Sharma, talked about withdrawal of incentives to those sectors in exports which had posted robust growth. After a 13-month contraction with demand slowdown in the western markets, India’s exports started recovering from November. However, because of a sharp decline till October, April-December shipments showed contraction of about 20 per cent. Releasing a study, Mr. Khullar said the Finance and Commerce Ministers were scheduled to meet later this week to decide on extension and withdrawal of stimulus packages for exporters for fiscal 2010-11. He also disclosed that India’s overall trade proportion to its GDP, which shot up from 35 per cent in 2004-05 to 55 per cent in 2008-09, was likely to be lowered by the end of the current fiscal to close to 54.8 per cent in view of economic conditions prevailing both in global and domestic markets. He felt that incentives should be extended to sectors that were still under stress and the stimulus package be withdrawn in those areas in which recovery had happened.

Referring to WTO negotiations, he said that progress on these had not been as per expectations and especially from countries like the U.S. which continue to stall these negotiations by insisting on market access to its agriculture products in developing world. He, however, clarified that countries like the U.S. had not unveiled what they would offer to those developing countries in return to market access that they were expecting from them.