Exporters don`t buy govt claim on target

Contrary to expectations of a slowdown in export growth due to rupee appreciation, the commerce ministry today said India would meet the $160-billion export target for 2007-08.

Exports in 2006-07 stood at $125 billion, which prompted Commerce Minister Kamal Nath to announce an ambitious target for this year.

However, in recent months, the rupee has appreciated to 40-41 to a dollar, giving rise to fears the target may not be met.

“We are confident of meeting the export target of $160 billion for 2007-08 if the rupee remains at 40-41 to a dollar. Going by current indications, we do not see any reason to revise the target,” Commerce Secretary GK Pillai said on the sidelines of a CII conference here.

Pillai’s remarks come even as the Prime Minister’s Economic Advisory Council recently said the 2007-08 exports would be around $147 billion due to the appreciating rupee, a growth of 18 per cent over 2006-07.

However, Indian exporters are pessimistic about reaching even the $140-billion mark.

“In the coming months, the growth will be in the range of 7-8 per cent only. We will not be able to cross even the $140-billion mark,” said Ganesh Kumar Gupta, president of the Federation of Indian Exporters Organisation, the apex body of Indian exporters.

A large number of Indian exporters have had to increase the prices of their products by up to 12 per cent.

Business Standard had found that exporters across the country were yet to get new orders as buying from countries like China was a cheaper alternative.

A recent government survey also painted a gloomy picture and predicted that a large number of jobs could be lost in export-oriented industries.

Business Standard recently visited export clusters like Jalandhar (sports goods), Agra (footwear), Moradabad (brassware) and Bhadohi-Mirzapur (carpets) and found that exporters, hit hard by the rise of the rupee, were either turning down orders or shipping consignments for a loss.

On its part, the commerce ministry expects that by 2012-13, exports will touch $300 billion and imports $400 billion, on the back of the continuing strong growth in the manufacturing sector, especially in special economic zones.

Pillai said in July, merchandise exports grew 16 per cent in dollar terms. “We will talk to various export promotion councils on ways to increase exports,” he said.

However, he ruled out any additional relief measures for exporters in the near future. Growth in merchandise exports in June was 14.05 per cent while the May growth was 18.07 per cent. In April, growth in merchandise exports stood at 23.06 per cent.

Pillai said the procedures related to export and import would be automated by the end of 2008. This, he added, was likely to reduce the transaction costs by up to 3 per cent.

“The cabinet secretary is chairing a meeting of various ministries today to take stock of the situation. When the system is up, exporters will be able to use the Internet to complete all procedures associated with imports and exports.”

THE STORY SO FAR

April 2007: Commerce Minister Kamal Nath sets an export target of $160 billion for 2007-08

July 2007: The Prime Minister's Economic Advisory Council says exports during the year will be around $147 billion

August 28, 2007: Commerce Secretary G K Pillai says $160 billion target will be achieved

# Federation of Indian Exporters' Organisation says exports to be $140 billion