Budget 2014: Exports to grow by 6.3% this fiscal; imports still down

New Delhi: India’s exports are expected to grow by 6.3 percent to $326 billion during the current fiscal, Finance Minister P Chidambaram said.

“Though 2013-14 began on a pessimistic note, I am happy to inform the House that the year will end with estimated merchandise exports of $326 billion, indicating a growth rate of 6.3 percent,” he said in the interim Budget speech in Parliament.

India’s merchandise exports was at $300.4 billion in 2012-13, a decline of 1.8 percent over the previous year.

“However, imports are down and this does not augur well for either manufacturing or domestic trade. Our aim must be robust growth in both exports and imports, with trade inbalance over a period of time,” Chidambaram added.

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[caption id=“attachment_76109” align=“alignleft” width=“380”]  India’s merchandise exports was at $300.4 billion in 2012-13, a decline of 1.8 percent over the previous year. Reuters[/caption]

Further, he said exports have recovered sharply and the recovery must be seen in the context of growth of global trade declining from 6.1 percent in 2011 to 2.7 percent in2013.

The country’s apex exporters body Federation of Indian Export Organisations (FIEO) said that support extended by the minister for research and development activities and reduction of duties on capital goods will help in increasing competitiveness of Indian products in the global market.

“The Budget is not very exciting for exporters but the support for R&D activities and reduction of duties on capital goods will help in boosting competitiveness of our products,” FIEO President Rafeeq Ahmed said.

However, he expressed doubt over touching the overall exports figure of $326 billion for the current fiscal.

“If the government will revise the export figures by about $8-10 billion then $326 billion is not difficult, otherwise it will be difficult, because to touch that figure we need about $30-35 billion each in the remaining two months,” Ahmed said.

During April-January this fiscal, exports grew by 5.71 percent to $257 billion, while imports dipped by 7.81 percent to $377 billion. The trade deficit was about $119 billion.

India’s exports increased 3.79 percent to $26.75 billion in January, helping the trade deficit to narrow to $9.92 billion.

On manufacturing, Chidambaram said that it is the “Achilles heel” of the Indian economy.

Outlining his vision in the sector for the next fiscal, the Finance Minister said all taxes, central and state that go into an exported product should be waived or rebated.

There should be a minimum tariff protection to incentivise domestic manufacturing, he said.

Meanwhile, in his Budget speech, Chidambaram said the deceleration in investment in manufacturing is particularly “worrying” and “consequently, there is no uptick yet inmanufacturing”.

The National Manufacturing Policy has set the goal of increasing the share of manufacturing in GDP to 25 percent and creating 100 million jobs over a decade.

“Eight National Investment and Manufacturing Zones (NIMZ) have been announced along the Delhi-Mumbai Industrial Corridor and nine projects have been approved by the DMIC Trust.

Five NIMZs outside DMIC have also been given in-principle approval,” he added.

Three more corridors connecting Chennai and Bengaluru, Bengaluru and Mumbai, and Amritsar and Kolkata are under different stages of preparatory work, Chidambaram said.

“Additional capacities are being installed in major manufacturing industries such as steel, cement, refinery, power and electronics,” the Minister added.

He said that several measures have been taken to promote MSMEs including notifying a public procurement policy, establishing technology centres and common facility centres, and launching the Khadi mark.

PTI