The commerce and industry ministry will review export sector growth to assess whether further stimulus to the exports was needed, especially to the labour intensive sectors. Hit by the downturn India's exports have been falling since September last year.
According to commerce and industry minister, Anand Sharma, the government would not hesitate to step in if the assessment pointed to a need to do so. He was speaking on the sidelines of the India Economic Summit organised by the World Economic Forum and the Confederation of Indian Industry (CII).
Labour-intensive sector exports like gems and jewellery, handicrafts, leather and small and medium enterprises have been adversely affected on slackening of demand from overseas markets.
Sharma added that the easy money monetary policy regime would not end even with the recovery becoming apparent and the economy on a slow revival track. He said the trend is expected to continue and in the coming quarter it will go into positive territory.
India's exports had been growing at a scorching 30-35 per cent till last July, but then they started sliding since October 2008 and ended up declining by about 13 per cent to around 34 per cent in May. The Reserve Bank of India (RBI) stepped in with a host of measures including boosting liquidity into the banking system. Additionally the government reduced transaction cost and facilitated cheaper credit availability for exporters in the Foreign Trade Policy of 2009-14.
Sharma also called for a more diffused approach to exports and asked exporters to prospect other markets like Africa and Latin America as demand in the more established markets of US, EU and Japan, accounting for more than 60 per cent of the country's exports revived.