The Government is set to review its ambitious plan to achieve goods and services exports of $900 billion by 2020 as it becomes evident that the target is likely to be missed, given the current global scenario.
The Government had set the ambitious target last year for goods and services exports, which were about $421billion in 2014-15.
“The exports target looks difficult to meet. I can’t say what the new target will be at this point of time, but we will do a mid-year review of the foreign trade policy soon,” said a senior Commerce Ministry official.
The review, aimed at taking corrective steps by assessing the impact of export sops on various sectors, will begin soon. “Looking at the global challenges, $900 billion is completely ruled out. In fact, whether we can reach $750 billion exports is also a question,” said another official privy to the details. However, no decision has been taken on revising the existing target or setting a new one.
Growth of India’s total goods exports in April-November 2016-17 was flat compared with the same period in the previous financial year.
Services exports dipped 4.79% to $13.11 billion in October, according to Reserve Bank of India data.
For FY17, industry expects merchandise exports to be $270-280 billion and services exports at less than $150 billion. The World Trade Organisation trimmed its forecast by over 1percentage point as it expects global trade in 2016 to grow at the slowest pace since the financial crisis.
The downgrade follows a sharper-than-expected decline in merchandise trade volumes in the first quarter, it said in September. The organisation expects global trade to grow 1.7% this year compared with its previous forecast of 2.8% and an estimate of 3.9% made in September 2015.
The WTO scaled down its forecast for 2017 to between 1.8% and 3.1% from 3.6% previously. Stakeholder consultations for the midterm review are likely to begin from January 15 and the exercise should end by September 2017.
“A mid-term review will happen and then the government will take a call on export target and incentives,” said Ajay Sahai, Director General of the Federation of Indian Export Organisations. At present, the commerce department extends assistance to exports under incentives such as interest equalisation scheme to boost shipments.
According to the WTO, the outlook for the remainder of this year and next year is affected by uncertainties, including financial volatility stemming from changes in monetary policy in developed countries, the possibility that growing anti-trade rhetoric will increasingly be reflected in trade policy, and the potential effects of the Brexit vote in the UK.
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