Announcing the new policy, commerce and industry ministry Piyush Goyal said he was hopeful that export of goods and services would cross $2 trillion by 2030, against an estimated $760-765 billion this year, while nudging the goods exporters to catch up with services, which is growing at a faster clip.
The government also sought to provide a thrust to ‘merchanting’ that will allow businesses to purchase goods from one country and export to another, without hitting Indian shores. Unlike the past, when FTPs were announced for five years, this time there is no sunset date, with the government promising periodic review to ensure that the regime remains flexible and responds to the needs of businesses.
Exports may go up by $100bn next yr: Goyal
Indian exports will face global headwinds but are expected to remain buoyant during the next financial year, driven by the upbeat mood in the export community, commerce and industry minister Piyush Goyal said on Friday.
“We may cross $765 billion (goods and services exports) by the end of the day. Raising exports by nearly $100 billion (in the current fiscal year) is not easy during these times. It considerably eases the pressure on the current account balance, which people were worried about. While services have made up for some of the shortfall on the goods side, even goods exports have increased and would have been higher but for some of the export restrictions,” he told TOI.
As the commerce department is holding extensive consultations before finalising targets for the next financial year, Goyal said that exporters remain upbeat. “Despite the challenges, the mood is such that they can help push exports by another $100 billion (next year). They have drawn a lot of inspiration from PM Narendra Modi’s clarion call (in August 2021). This year when the whole world thought it’s impossible, they have more than achieved the target.”
Next year too, some of the checks on exports such as those on wheat and restrictions on sugar and the windfall tax on petroleum products may be in place due to the geo-political tensions, the uncertainty caused by El Nino and the government’s bid to ensure that there is more than sufficient stock of foodgrains.
Goyal said that new measures such as merchanting – allowing exporters to buy in a country such as Italy and sell in the UAE – will help generate more foreign exchange while the push towards internationalisation of the rupee will help lower the transaction cost, especially for small businesses.
“For someone selling to another country, there are multiple foreign currency transactions which have conversion costs and transaction costs. Both sides are hit because of that. Internationalisation of the rupee will benefit both the sides and we can hope to export more,” he said.
The minister, however, recognised the need for sensitisation of businesses and close coordination between central banks to ensure that local currency trades take place. He said RBI has been coordinating with other central banks and banks to push for rupee-denominated trade.
On the overall trade, Goyal said that over the next few years, as bio-diesel and electric vehicles grow, the surge in oil imports will moderate. He said that an increase in non-oil imports signals that the economy is doing well and the world sees demand in India.
