Taking stock of India’s performance and recognizing challenges faced in the year gone by, Indian Commerce, Industry & Textile Minister Anand Sharma unveiled Annual Supplement 2012-14 to the 5-year Foreign Trade Policy 2009-14 in an effort to make mid-course correction where necessary to ensure that India is able to achieve the target of US$ 500 bn exports by 2013-14.
It is indeed a difficult task to present a policy which aims for rapid growth in exports in the face of weak global demand and the unabated persistence of the global economic crisis which erupted 4 years ago.
The difficult economic situation in the Euro Zone crisis poses a real risk of destabilizing the fragile recovery and sinking the world into yet another recession. We are also faced with an unprecedented volatility in commodity prices and the crude oil prices touched a new high last year, adding pressure on our import bill, said the Minister.
Adding further, he said, “The Indian economy has also not remained insulated from these developments and the GDP figures of last quarter are indeed a cause of serious worry. The Index of Industrial Production has also highlighted the slowdown in manufacturing.
“The Gross Fixed Capital Formation has also slipped to less than 30 % indicating a deceleration in investments. The weakening of the rupee will have its own implication on our annual import bill. Clearly Indian economy is passing through a difficult phase.”
However, as we look at the achievements of the year gone by, we can derive some satisfaction from the fact that Indian exports maintained their momentum registering a 20.9 % growth last year to touch US$ 303 bn.
This by all accounts is a commendable achievement and a critical turnaround, given the fact that exports had declined to US$ 178 bn in 2009-10. We have been able to reach thus far by providing a stable policy environment and the market diversification strategy which enabled an outreach to newer markets in Asia, Africa and Latin America has clearly paid off.
Throughout the last 3 years, we have worked in a spirit of true partnership between government and the exporting community, and we have intervened effectively when necessary to give stimulus to the struggling sectors, also said the Minister.
As a stable policy regime has been a key ingredient of our Foreign Trade Policy and the schemes which were put in place earlier have served us well, the Minister said, “We intend to continue with these schemes in this Annual Supplement as well with suitable modifications but within a philosophy based on seven broad principles:
(a) Give a focused thrust to employment intensive industry because we view exports not only in terms of their economic contribution but as a means of generating gainful employment;
(b) Encourage domestic manufacturing
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