The Economic Survey on Wednesday said urgent sector-specific measures were required to deal with the slowdown in exports which have dipped over the past few months widening the trade deficit including diversification to new markets.
The Survey said urgent action was required to deal with issues related to export sectors, especially trade facilitation, taxes and credit and matters pertaining to infrastructure to boost exports. It goes on to mention that the global slowdown has posed serious challenges for India as export growth was negative since May 212. Exports entered the positive zone after a gap of eight months, recording a growth of 0.82 per cent to $25.58 in January.
“There are many micro, port-specific and sector-specific issues that need urgent attention. These are related to infrastructure, trade facilitation, tax and tariffs, and credit, and can realistically be addressed in the short and medium-term to promote India’s export growth,” it said. Referring to the ports, it said even the best of the ports do not have the state-of-the-art technology as was in Singapore or Shanghai. It said simplification of documentation procedure was important as an average Indian exporter was required to sign at about 130 places to complete an export transaction.
It called for fixing a time limit for disbursal of duty drawback, service tax refunds and central excise rebate claims to exporters as delays adversely affected the working capital, making them less competitive. “While India has successfully diversified its export basket, more needs to be done on the product diversification front. It also has to reposition itself in its traditional areas of strength like textiles and leather manufactures where it has lost considerable ground,’’ it said.
On gold imports, it said the rise in imports of gold was one of the factors contributing to high trade deficit and current account deficit (CAD) in 2011-12, forming 30 per cent of its trade deficit.