FIEO proposes $750 billion export target for FY2018-19 in India’s new FTP

The Dollar Business Bureau | @TheDollarBiz The Federation of Indian Export Organisations (FIEO) has proposed an export target of $750 billion by FY2018-19 co-terminus with the new five year Foreign Trade Policy (FTP) that the Indian government is expected to announce later this month, Ajay Sahai, Director General & CEO FIEO, told The Dollar Business.

Ajay Sahai, Director General & CEO, FIEO

He added that FIEO is of the view that a long term target should be fixed rather than annual targets and after fixing the target, the government should review it on an annual basis and put in place any mid-course corrections if required to stay on track.  In the last FTP (2009-2014), the government had set an export target of $500 billion by FY2013-14. However, India’s exports stood at around $313.5 billion in FY 2013-14 which was less than the revised annual target of $325 billion for the year. Since the last FTP, India’s exports have seen ups and downs. India’s exports exceeded the target for FY2010-11 and FY2011-12, but fell below the targets in the subsequent two years despite downward revisions of the annual targets. Ajay Sahai said that exports are dependent on both external and domestic factors such as global trade and manufacturing. Both these factors along with the diversification strategy of the government helped India’s exports perform well in FY2010-11. However, a slowdown in global trade, currency devaluation of several countries and poor performance of the domestic manufacturing sector hurt India’s exports in the subsequent years.  

Source - Ministry of Commerce

  “Global trade grew by just 2.1% in 2012 and 2.3% in 2013. Moreover, we had negative IIP numbers in most of the months during the period, representing decline in manufacturing. Despite having a favourable exchange rate, Indian exporters lost the advantage due to contraction in global demand coupled with the fact that currency of some of our competitors declined more than the Indian rupee, thus blunting the exchange rate advantage,” Ajay Sahai told The Dollar Business. However, India’s exports are back on the growth trajectory helped by growth in exports of marine sector, leather goods, engineering sector, chemicals and pharma, and textiles in the first quarter of FY2014-15. FIEO expects India’s exports may grow to around $340-$350 billion in FY2014-15, up around 8-12% from the previous year.