Trade bodies FICCI, FIEO fear poor outlook for exports
08 Aug 2011
Despite finance minister Pranab Mukherjee's assertions that India's economy would barely be touched by the new global downturn spurred by the US debt crisis, a survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) says that India's exports at least will take a considerable hit.
Similar sentiments were voiced today by the Federation of Indian Export Organisations (FIEO).
"The world's largest economy is entering another recession, while the euro zone is in a debt crisis. Thus our worst fear - that exports in the third and fourth quarters of this financial year will be affected - may come true," FIEO president Ramu S Deora (brother of former union minister Murli Deora) said in a statement.
According to the FICCI study, the outlook for exports is also tempered by rising interest rates, increasing raw material prices, and the mounting cost of petroleum.
''It may however be noted that while export growth will not be as significant as seen in the recent past, we will still clock an average growth of about 20 per cent this year, mainly due to diversification of our export markets in Asia, Africa and Latin America,'' FICCI added.
The survey attributes the sluggish 2.5 per cent growth outlook for the US to weak demand, weak investment sentiments, and a slowdown in government spending in the months ahead.
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