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India says US slowdown to hit export growth

The US economic downturn is likely to take its toll on Indian exports this year but it is too early to say how bad the effect will be, a senior commerce ministry official said on Friday. "The slowdown in the US economy will have an impact on export growth rate...but to what extent, we will have to wait and see," Director General of Foreign Trade NL Lakhanpal told Reuters in an interview.

The government has said it is gunning for 18 per cent annual export growth until 2004 to grab one per cent of overall global trade, up from 0.64 per cent now. But 18 per cent export growth for this year now looks ambitious.

Exports grew just 5.51 per cent in April down from a storming 20 per cent year-on-year growth rate for 2000-01 (April-March).

Analysts have warned of more sluggish figures in coming months due to the slowdown in the United States which takes nearly a quarter of India's exports.

But Lakhanpal said it was too early to forecast full-year figures and said he was confident they would be much better than the April numbers.

"One can't say it's (the April figures) indicative of a trend. Within 12 months some are good, some are not so good," Lakhanpal said.

"Our annual export figure would not be in relation to the April figure. It would be much higher," he added.

FINALISING MARKET DRIVE

He said the ministry was finalising its market access drive announced in its 2001-02 trade policy that seeks to promote India as a brand in world markets and to help exporters find new markets. The push would give exporters funds to penetrate new destinations and consolidate existing markets.

"The size of the fund is not finalised but we have been promised we will get whatever funds we require," Lakhanpal said.

Indian exporters and industry bodies complain that creaky infrastructure and high input costs as well as bureaucratic bottlenecks make their goods uncompetitive on world markets.

He said the aim was to achieve an "export orientation" mindset in the government like that existing among India's Southeast Asian neighbours, adding that establishing agri-export zones and special economic zones was part of India's medium-term export strategy.

These zones, modelled on the Chinese model, would be outside customs regulations. Work on two such zones in the western state of Gujarat and the southern state of Tamil Nadu was progressing at a quick pace, he said.

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