The Federation of Indian Export Organisations (FIEO) on Monday warned that it would be difficult to achieve the $300-billion export target this fiscal until corrective policy measures were put in place.
Newly elected President M. Rafeeque Ahmed told journalists here that the biggest disadvantage faced by the exporters was the prevailing high interest rates. If India had to maintain an edge over its rivals in the export field, it was important that infrastructure and capacity building should be put in place, he said. The sovereign debt crisis in the eurozone posed a major challenge to global trade, including Indian exporters. Despite difficult conditions, the country's shipments grew 26 per cent during April-December this fiscal. The growth was aided by increase in commodity prices, including those of metals, he added.
“But with the cooling of commodity prices, shipments may be affected in value terms, making it difficult to achieve the $300-billion target for 2011-12. We expect exports to touch $280 billion in the current fiscal,'' he said.
Even in the next fiscal, exports might grow at a lower rate of 12-15 per cent, taking the estimated shipments to $320 billion in 2012-13, he said. The FIEO chief said if the situation did not improve, the three-year vision of reaching $500 billion exports would be a tough job.
The U.S. and the European markets accounted for about 26 per cent of India's merchandise exports and any disruption in these destinations was bound to cause a dent in the overall shipments.
The World Bank has revised downward the growth estimates at 4.4 per cent for global trade, while the IMF has pegged it near 4 per cent. “These are indications of moderating growth in our exports,'' Mr. Ahmed said.
The President said Indian exports suffered a cost disadvantage against China as interest rates were high here. Chinese exporters were able to get finance at a cheaper 4 per cent. There could be some silver lining, as China too was facing increase in the manufacturing cost, the FIEO said.