Commerce & Industry Ministry Released Draft Strategy for Doubling Exports
Ministry of Commerce and Industry on 23 February 2011 released a draft strategy paper for doubling exports to $450 billion by 2014.
The Ministry of Commerce and Industry on 23 February 2011 released a draft strategy paper for doubling exports to $450 billion by 2014. The release of the draft paper marked a move towards managing the widening trade deficit that currently stands around $115 billion as per the estimates. The government aims to bring the dis-balance in trade to below 10 per cent or 9 per cent of the GDP. To be noted here is that India's exports in the 2009-10 fiscal were $178.6 billion, a decline of 3.6 per cent over the previous fiscal.
According to the draft paper the trade deficit is likely to increase from 7.2 per cent of GDP in 2010-11 to nearly 13 per cent of GDP in 2013-14 though the proportion of merchandise trade to GDP will increase to nearly 48 per cent in 2013-14 from the present 35 per cent. Therefore it was pointed out that India as no option but to focus on higher export growth and devise a strategy for rapidly increasing merchandise exports to ensure that the balance of trade (BoT) and current account deficit remain within manageable limits.
It was also highlighted in the draft that exports would be required to grow by 26 per cent per annum to achieve the target. Even with the achievement of the export target in 2014, trade deficit will remain over 9 per cent of GDP. India will also need to upgrade technology and indulge actively in research and development activities, especially in pharmaceutical, electronics and automobile sector. The draft emphasised on the importance of building Brand India. Building Brand India will require strengthening of quality enforcement regime through BIS, Export Inspection Council and building of brand strategy by export promotion councils.
The draft mentioned that market diversification strategy is important because demand in the traditional markets, including developed world is likely to be sluggish because of slowing output expansion in these economies. India therefore needs to focus on markets in Asia, including Asean, Africa and Latin America.