Robbing Peter to pay Paul?

• In April 2008, exports touched Rs 60,000 crore, a 30 per cent growth in rupee terms.
  
  
• 52 per cent of respondents to the 69th CII Business Outlook Survey said they expect exports to grow during the first half of 2008-09.

So, are exports unscathed by government’s inflation control measures—such as bans on exports of edible oil, rice and cement? The Federation of India Export Organisations says yes, with a caveat. “Crude oil prices are shooting through the roof; the prices of other commodities, such as gold and steel, are spiralling, too. So, the value of exports—and not necessarily its volumes—is going up. Then, the effect of the depreciating rupee has also boosted the value of exports,” says G.K. Gupta, President, FIEO.

But the scenario is not as happy as the figures suggest. Already, Indian rice exporters are facing threats of lawsuits from foreign buyers following the ban on the export of the commodity.

And FICCI has estimated that the export tax on steel could force steelmakers to defer their Rs 1,00,000 crore expansion plans. “The government’s inflation-control measures are pushing foreign buyers to lose faith in Indian exporters,” says Gupta.

—Kapil Bajaj