Indian exports will fall short of the annual target of $325 billion for the current fiscal (FY'14) though it would be above last year's figure of $300.4 billion, reports quoting commerce and industry minister Anand Sharma a saying on Tuesday.
The commerce ministry expects the country's current year exports to be a little over the 2011-12 figure of around $306 billion.
In 2012-13, the country's exports declined by 1.8 per cent to $300.4, due mainly to the slowdown in global demand.
The Federation of Indian Exports Organisation (FIEO) president Rafeeq Ahmed has projected the country's exports at $312-315 billion during the current financial year.
India's merchandise exports increased by a meagre 4.79 per cent to $282.7 billion during the April-February 2013-14 period while imports into the country during the 11-month period were down 8.65 per cent at $410.86 billion, still leaving a trade deficit of $128 billion for the first 11 months of the fiscal.
"We fall short but we will do better. Definitely much better than last year and we will be bring down the trade account deficit substantially," Sharma was quoted as saying.
India saw its traditional exports slide for the first time in the last one decade. Export of gems and jewellery from the country is set to fall by 10 to 15 per cent this fiscal, mainly due to the 10 per cent import duty on gold.
While exports of polished diamond registered a 20-per cent increase from April 2013 to February 2014 year-on-year, gold jewellery export has declined by almost 45.56 per cent.
The Gems and Jewellery Export Promotion Council (GJEPC), the Indian industry's umbrella organisation, said the country exported $718.36 million worth of gold jewellery in February, which was an increase of just 1 per cent over February 2013.
The country exported $6.35 billion worth of gold jewellery in the 11 months from April 2013, down from $ 11.67 billion a year earlier.
India's engineering exports fell by over 3 per cent in February, the first time in seven months, because of steep decline in shipments to the key ASEAN markets of Singapore, Malaysia, Indonesia and Thailand with which India has entered into a Free Trade Agreement.
Engineering exports to these countries plunged sharply – by a steep 79.11 per cent to Singapore, a major member of the Association of Southeast Asian Nations; exports to Thailand were down 61 per cent; exports to Malaysia fell 70 per cent and exports to Indonesia fell 36 per cent, according to the Engineering Exporters Promotion Council (EEPC).
However, engineering exports to the US turned around from negative to a growth of 8 per cent. Cumulative April-February data for the US still remains in the negative by about 5 per cent.
While exports to the ASEAN countries dropped sharply, export data showed a sizeable improvement in shipments of key engineering products to South Korea and Japan, the two other countries with which India has entered into FTA, EEPC said.
Meanwhile, India might have suspend exports of wheat even without achieving the target of 2 million tonnes, due to fears of crop damage from the recent hailstorms across the country.
India has already accepted bids for 1.40 million tonnes of wheat exports so far this year out of the 2 million tonnes target set by the food ministry in August last year.
The government has targeted export earnings of Rs3,400 crore from wheat exports by June 2014, at an average price realisation of $300 a tonne.
Market response to India's wheat offer, including those of PEC and MMTC, however, was poor due to a price fall in global markets. India exported 4 million tonnes of wheat last year.
Meanwhile, the government's pre-election bonanza for the sugar industry has been questioned at the World Trade Organisation, making it the second farm subsidy to face global scrutiny in recent months.
Australia, Colombia, Brazil and the European Union, along with Paraguay, Thailand, El Salvador, Canada, the US, Pakistan and New Zealand have objected to India's export subsidy for sugar meant to clear a glut.
Meanwhile, the FIEO is working on a paper for the new policy which would include recommendations to increase exports.
India is exploring possibilities of entering into currency swap agreements with trade partners to shore up exports and bring down trade deficit, which is putting pressure on the rupee.