India's merchandise exports are likely to surpass the target of $126 billion during 2006-07 if the first quarter growth is sustained, Commerce Minister Kamal Nath said.
The target of $126 billion exports will be exceeded going by the 40 per cent growth momentum seen in the first quarter of this fiscal, Nath said at a meeting of the Parliamentary Consultative Committee of the Commerce Ministry.
Exports grew by 23 per cent to reach $103 billion in 2005-06, he was quoted as saying in an official release on Thursday.
Nath also said that Engineering Process Outsourcing (EPO) services from India would be a key element of the country's engineering export strategy, and the development of the EPO sector will have a far-reaching impact on India's engineering industry as a whole.
The EPO market in India has the potential to exceed $40 billion dollars by 2020, which would catapult India's market share in this category to 30 per cent from the current 12 per cent, he said.
All stakeholders, including government, service providers and trade bodies must boost investments in infrastructure and improve marketing efforts to tap the EPO market, he said.
Engineering goods exports from India have crossed $5 billion in the first quarter of the current financial year, showing a growth of 20 per cent, he said, adding it had the potential to grow at a rate of 30 per cent annually.
The government is giving high priority to engineering, which was an important segment of India's manufacturing sector, he said.