Amid continued bad news on the economic front and the drubbing of the rupee, Commerce and Industry Minister Anand Sharma will meet Finance Minister Pranab Mukherjee to discuss issues such as rupee depreciation, cost of credit and eurozone crisis that could seriously impact exports in the coming months.
The meeting is likely to take place before the announcement of the Foreign Trade Policy (FTP) in the first week of June that is likely to spell out the blueprint prepared by the government to counter the serious challenges faced on the foreign trade front.
“I will be talking to the Finance Minister on these issues. The government will do everything within its power to ensure that the exports momentum is not lost. But the constraints of resources will also have to be kept in mind. We have to take a balanced view of the situation and the concerns expressed by the stakeholders and work out a solution that ensures that import bill does not outpace exports,” he said after a meeting with the stakeholders and industry representatives of various export sectors.
Mr. Sharma stressed the need to work out a deal with focus on labour-intensive sectors where the concerns had a clear social dimension on job creation. The Minister had recently indicated giving some sops to certain sectors, including the labour intensive ones, to cushion them from the slowdown in Western markets. The growth in exports has been a bit of disappointing, indicating that the economic slowdown in Western nations had already started having an impact.
In April, exports of gems and jewellery and readymade garments contracted by 25.7 per cent and 9.7 per cent to $2.6 billion and $1 billion, respectively. In March, exports contracted by about 5.71 per cent year-on year.
The economic crisis in the U.S. and Europe has hit Indian exports badly. Both these markets account for about one-third of the country's total shipments. The rupee has hit its record low level of 54.60 against the dollar intra-day on Thursday. “All issues will be factored in, when we take a view on FTP. Exports growth momentum should continue given the pressure on current account and trade deficits,” he added. He also said that the government would continue its efforts to increase exports in new markets such as Latin America and Africa.
Chairman of Apparel Export Promotion Council A. Sakthivel said that the government should look urgently on reduction of transaction cost and lowering of interest rates to boost exports. Besides the various export promotion councils, representatives of CII and FICCI were also present at the meeting.