New Delhi: Painting a gloomy picture on external trade front, the Economic Survey on Thursday cautioned that the global slowdown, particularly in the US, will impact India's export growth in 2008-09 and advised the government for relief to exporters in the wake of a costlier rupee.
"The outlook for exports in 2008-09 may not be as bright as in the past few years with lower projections in world GDP and world imports and exchange rate developments," according to the pre-Budget Economic Survey tabled in Parliament.
India's exports stood at $111 billion in April-December 2007, registering a growth of 21.6 per cent. But it may fall short of the 160 billion dollar export target for the year.
It said the two developments that need to be monitored are the fall in export growth to the US in general and fall in textile exports in particular to the US and EU.
"Though exports to the US have already been slowing in 2006 and 2007, a further slowdown may be unavoidable, but may be relatively modest. The slower Indian economic growth in 2007-08, relative to 2005-06 and 2006-07, may also have a temporary dampening effect on capital inflows," it said.
Emphasizing the need for "some fundamental policy changes besides relief measures already given", the Survey suggested measures for merchandise trade sector.
The measures include continuation of reduction in customs duty resulting in low import duty, weeding out of unnecessary customs duty exemptions, abolishing export schemes that are redundant with fall in import duties and streamlining existing schemes.
There is also a need to check proliferation of Special Economic Zones, evolve clear cut policy for beneficial Comprehensive Economic Cooperation Agreements (CECAs) even with some developed countries "instead of just FTAs and PTAs which should be well integrated with our economic and trade policy reforms."
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