Indian exports could continue to remain subdued this year amid a dismal outlook for the trade sector and world trade volume output set to decline by 11 percent, the Economic Survey for 2008-09 released by the government Thursday said.
Citing recent International Monetary Fund (IMF) projections of a negative growth of 1.3 percent in world output and falling import demand from major trading partners, the survey said: "India's export of goods and services is expected to be impacted."
India's merchandise exports registered a decline for the second straight month in May with the value of shipments 29.2 percent lower at $11.01 billion compared to the $15.55 billion earned the same month last year.
Merchandise exports had dipped 33.2 percent to $10.74 billion in April, as per data on foreign trade released Wednesday by the commerce and industry ministry.
A revival in exports was expected in 2010 as the IMF projected the world trade volume to grow by 0.6 percent and the world output by 1.9 percent, the survey added.
It said a substantial fall in petroleum and commodities prices could have a positive impact on the import and industrial sector.
{{/usCountry}}It said a substantial fall in petroleum and commodities prices could have a positive impact on the import and industrial sector.
{{/usCountry}}The survey also suggested that the government avoid protectionist measures and instead bring reforms to the sector.
"Besides short-term relief measures and stimulus packages, some fundamental policy changes are needed," the survey said.
Among suggestions to boost the trade sector, the survey proposed:
- Continuation of the reduction in customs and excise duty
- Streamlining of existing export promotion schemes
- Giving special attention to export infrastructure
- Rationalisation of port service charges
- Weeding out unnecessary customs duty exemptions
- Checking proliferation of special economic zones