India’s exports may not sustain the growth rate of 40-45 per cent in the coming months due to the uncertain economic conditions in the western markets, Commerce Secretary Rahul Khullar cautioned on Saturday.
The average exports growth in the last five months has been over 40 per cent and even touched 57 per cent in May.
“...wait for another 3-4 months. Things are not well with the global economy right now. These heady growth rates of 40-45 per cent may not continue...the 40 per cent growth rate is a pipe dream that will not continue for rest of the year,” Mr. Khullar said here at a PHD chamber function.
However, he said that exports would grow at a rate of 20 per cent and it would not come down below that.
“The reason for not seeing less than 20 per cent growth is because in certain sectors India is now so vastly competitive that it is impossible for us not to be in the market,” he said adding that sectors like leather, textiles, carpet, engineering and pharmaceutical would continue to grow.
India’s exports during April-June, 2011-12, grew by 45.7 per cent to USD 79 billion.
Commenting on the popular export benefit scheme -- Duty Entitlement Pass Book (DEPB), he said that “on 30th September it will die” and duty drawback scheme will kick in.
“The biggest beneficiaries of duty drawback scheme will be small and medium enterprises and in terms of sectors it is engineering and chemicals,” he added.
During the three months (June to September), the commerce and revenue secretary would work out a smooth transition from DEPB to duty drawback.
Mr. Khullar also sought feedback from industry for the transition.
Exporters are not happy with the duty drawback scheme and are demanding to further extend the 14-year old DEPB scheme.
On inflation, Mr. Khullar said it is expected to ease after September. “You will see inflation come down...wait till September. Unless we manage the supply side, we won’t be able to tame inflation,” he said.
Good agricultural production will ease pressure on inflation, he said adding price rise was triggered due to increase in prices of milk and milk products, egg and meat.
Inflation inched up further to 9.44 per cent in June.
Talking about Free Trade Agreements India was entering into, Mr. Khullar said “No trade deal can be a win-win situation for every industry. It can be a win-win situation for countries though“.
On Special Economic Zones, the secretary said unless the government spells out Direct Taxes Code (DTC), “we can’t stimulate investments in the SEZs. It is important to ensure the flow of investments into the zones”.