India's exports will surpass the $200 billion target for the current financial year and the gradual roll-back of stimulus measures is not likely to impact growth of the country's overseas shipments, according to the pre-Budget
Economic Survey .
It said the outlook for India's trade has brightened with good growth of 29.5 per cent during the April-December, 2010-11, period. Imports grew by 19 per cent during the period.
"Current indications are that India will not only achieve the target of $200 billion but surpass it in 2010-11... The gradual withdrawal of stimulus measures by India and other countries is not likely to adversely affect India's rising exports," the survey said.
However, it said there is a need to remain vigilant about any fallout from the financial turbulence in the euro zone and the new disturbances in the Middle East.
It said that the slowdown in import growth from October, 2010, and a rise in exports from November, 2010, has helped bridge the trade gap.
"Although the concerns on the trade deficit front have subsided with a pickup in exports in the last five months and slowdown in imports in the last three months of 2010-11 (April-December), the situation needs to be watched," it said.
Also, the deceleration in the net surplus of services trade is a "cause of worry" on the "current account deficit", it added.
Further, it said that the rising
inflation could erode agricultural exports.
"This has necessitated the formation of a systematic inflation-tackling mechanism with early warning systems, rather than resorting to ad hoc policy measures," the survey said.
Hit hard by the global slump in demand in 2008, the government had provided several stimulus measures to boost the country's exports, including a 2 per cent interest subsidy, tax benefits and many market and product-linked incentives.
After the exports starts reviving, the government in the last Budget had withdrawn some benefits.
During the reviewed period of the current finanacial year, outbound shipments grew by 29.5 per cent to $164.7 billion.
Imports during the same period, 2010, stood at $246.72 billion, as against $207.31 billion over the same period last year. The trade deficit stood at $82 billion, marginally higher than $80.13 billion in the same period last financial year.
The survey said the country needs to focus more on engineering sector exports, which contribute over 20 per cent to total merchandise shipments.
On services exports, it said that India is moving towards services-dominated export growth.
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