Aug 27, 2009
India targets emerging markets to offset export slide
Aug 27, 2009
NEW DELHI, Aug 27, 2009 (AFP) - India plans to boost trade with emerging markets in Africa and South America to offset a slide in exports to recession-hit developed nations, Commerce Minister Anand Sharma said Thursday 27 August.
Photo: AFP/File/Manan Vatsyayana
The country is aiming for growth of 15 percent over two years to achieve exports of 200 billion dollars by March 2011, up from 168 billion dollars in March 2009, Sharma said.
"Our exports have suffered a decline in the last 10 months due to a contraction in demand in the traditional (developed) export markets," he told reporters as he released the government's five-year trade policy to 2014.
"We've taken a conscious view to expand and diversify our export markets, especially in the emerging markets" such as Africa and Latin America, he said.
The announcement was the first major trade policy statement by the ruling Congress government since it was swept back to office last May.
Sharma, who plays host to a meeting of global trade ministers next week in New Delhi, added India remains committed to the successful completion of the Doha round of World Trade Organisation talks.
But he reiterated India's insistence that any deal must be in "response to the aspirations of millions of people of the developing world."
India had originally set an export target of 200 billion dollars for the current year to March 2010 but later said it was unlikely to meet the goal.
Exports fell by 31 percent in the financial quarter ended June as demand collapsed in India's main markets of Europe and the United States.
Sharma said he would not "hazard a number" for current year exports, saying only he hoped to "sustain" sales through such steps as cheaper finance, better export-related infrastructure, tax relief and lowering of transaction costs.
He noted India was framing its export policy against "the backdrop of an unprecedented (global) economic slowdown."
India's biggest exports include textiles, handicrafts and leather goods.
The government's new policy won praise from industry.
"The dynamic initiatives" announced by the minister "will hopefully reverse the declining trend in our exports," said Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry or FICCI.
Sharma said he hoped India would return to its high export growth path of around 25 percent annually during the final three years of the trade policy.
"The long-term policy of the government is to double India's share in global trade by 2020," Sharma said. India's share of global trade in goods and services now stands at 1.64 percent.
Sharma said two new free trade treaties India has signed recently -- one with South Korea and another with the 10-member Association of Southeast Asian Nations or ASEAN would open up "vibrant" new markets.
Unlike China, where overseas sales have been a main growth driver over the past three decades, exports account for around 15 percent of gross domestic product in India's still relatively inward-looking economy.
Economists say this, along with its vast domestic market of nearly 1.2 billion people, has helped shield India's economy from the worst of the global slump.
But the decline in exports has caused heavy job losses in labour-intensive sectors such as garments and jewellery.by Penny MacRae
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