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Get ready for a single-digit export growth rate this year

Sidhartha

The global slowdown is likely to cloud the country's export performance during the current fiscal with exports of major trade items projected to grow only marginally.

Against a healthy 20 per cent increase in exports in 2000-01, experts and export promotion councils are predicting the growth rate to dip to single digit levels in the current year.

Engineering goods, textiles, gems and jewellery and agri products, which accounted for over 50 per cent of India's total exports of $35.8 billion between April-January, 2000-01 are expected to grow by just 0-5 per cent in this fiscal. These sectors grew by over 20 per cent during the period.

Gems and jewellery and apparel EPCs said they will be happy if they are able to maintain last year's growth rates of 2.9 per cent (April 2000-January 2001) and 5.5 per cent, respectively. The two sectors have been the worst hit with exports dipping nearly 20 per cent during January-April, 2001.

"Things are expected to improve from July when the buying season in the global market starts. But we would be happy if we can achieve last year's level," said Gems and Jewellery EPC chairman Sanjay Kothari. The council has however projected an increase of 5 per cent to the commerce department.

"Last year (2000) was the millennium year when demand for almost every product peaked. But things are different now and the US slowdown has only compounded the problem," said Kothari.

"Our first effort is to make up for the deficit of last year and towards this end we have already released the FCFC (first-come-first-serve) quotas four times in 2001, compared to the usual practice of two releases," said Rajeev Takru, director general, AEPC.

Similarly, in case of engineering goods which grew 30.44 per cent to $5.96 billion last fiscal, the Engineering Export Promotion Council is projecting an increase of a mere 5.7 per cent in the current year.

"Based on the current trends we have projected an increase in exports to $ 6.3 billion," said EEPC executive director C S Shukla. He added that engineering goods exports grew by just 3-4 per cent in April this year.

Agricultural exports too registered a marginal decrease during April-January 2000-01. Agri exports, which account for about 9 per cent of India's exports will remain at about the same level, said B Bhattacharya, dean, Indian Institute of Foreign Trade. "Except for non-basmati rice, India remains uncompetitive in sugar and wheat in the global market," he said.

The chemicals and allied products is the only silver lining in the otherwise gloomy exports scenario. Capexil has projected the exports to grow by over 26 per cent in 2001-02 against 23 per cent last fiscal.

According to Bhattacharya, India's export growth is usually twice the global average with a major part of the increase achieved in the last quarter. He estimated Indian exports to grow by about 10 per cent during the year.

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