New Delhi: After remaining in the negative zone throughout this year battered by demand slowdown, India's exports are expected to show improvement in 2016, propelled by government incentives. But there is a word of caution.
Improvement in outbound shipments would still depend largely on demand revival in the global markets and movement in prices of crude oil. The main markets of Indian exporters - the US and Europe - are not yet showing strong signs of demand revival. The two regions account for over 30 percent of the shipments. Multilateral body World Trade Organization too has lowered the trade growth projections for 2016 to 3.9 percent from 4 percent earlier.
"I (would) like to have exports improving (in 2016)," Commerce and Industry Minister Nirmala Sitharaman said when asked about her expectation on exports performance next year. The minister's expectation is based on the incentives announced by the government this year. It has extended the 3 percent interest subsidy for exporters besides giving benefits under merchandise Export India Scheme (MEIS) and enhanced duty drawback rates.
"We have given support under MEIS India Scheme. We have also announced the interest subvention scheme. So there should be an improvement on our exports soon," she said recently. The government has also taken steps to improve ease of doing business for traders. It has reduced the number of mandatory documents required for import and export of goods to three in each case from 10 earlier.
The Federation of Indian Export Organisations (FIEO) has said meanwhile that improvement in export performance will depend on the crude oil and commodity prices. "Further softening of prices of crude oil and commodity may dampen the export's growth further. Since global situation will take some time to improve, a 15 percent increase in exports may take us to USD 305 billion in 2016," FIEO President S C Ralhan said. Last year, exports had stood at USD 323.2 billion.
"In the 11 months of 2015, exports have reached USD 243.68 billion. Going by the current trend, we may end with exports of USD 265 billion this year, reflecting a decline of 21.9 percent as compared to 2014," Ralhan said. As for the growth in shipments during the coming year, he said the support extended by the government will help in pushing up exports.
