Stating that the country’s trade deficit in 2013-14 narrows by 27.8 per cent from 190.3 billion to 137.5 billion, the Government in its first Economic Survey mentioned that it was largely due to a fall in imports of gold and capital goods.
However, it said there was not much change in the POl (Petroleum, Oil and lubricants) deficit which was hovering at around $100 billion in the last two years and constituted 36.7 percent of total imports during 2013-14.“On the back of several measures taken by the Government, the value of gold and silver imports fell by 40.1 percent to $33.4 billion in 2013-14, with the import of yellow metal declining from 1,037 tonnes in 2012-13 to 664 tonnes,” survey said.
“Many labour-intensive export sectors like textiles, leather, handicrafts and carpets have performed relatively better. While textiles exports grew by 14.6 percent, the exports in leather and leather manufacturers sector recorded a 16.7 percent jump, with the European Union and USA being the major markets,” survey added.
In pointed out that the share of India’s textile exports to China also rose from around 2 percent in 2010-11 to 5 percent in 2012-13 and further to 7 percent in 2013-14. The Services sector including travel, transportation and insurance improved slightly in 2013-14 with a 4 percent growth rate, compared to 2.4 percent during the previous year
In 2013-14 India’s exports stood at $312.6 billion as against the targeted $325 billion.The country’s exports grew by a double-digit pace for the first time in seven months in May, narrowing the trade deficit.“In 2014-15 first quarter, trade deficit declined by another 42.4 per cent,” it said.“India should aim to increase its share in world merchandise exports from 1.7 per cent in 2013 to a respectable ballpark figure of at least 4 per cent in the next five years,” it said, adding: “India’s exports should grow consistently by around 30 per cent annually to reach” that figure.
It said the aim is “not impossible” as during 2003-04 to 2007-08, India’s exports grew consistently by above 20 per cent annually.
However, it said that achieving this aim in the medium term is a big challenge and some basic steps need to be taken like product diversification, building export infrastructure, focusing on useful free trade agreements, addressing the inverted duty structure, rationalising export promotion schemes, and taking steps for trade facilitation.
Notwithstanding the recent good performance survey in its outlook said that “The quarterly and monthly export and import growth performance of the world and major trading countries is also not very encouraging. Thus world trade and India’s exports are still fragile. There is also the downside risk of external shocks like the latest increase in oil prices owing to the Iraq crisis.