India plans to cut transaction costs for exporters and ensure the availability of dollar finance as it looks to reverse a decline in exports and double outbound sales of goods and services over the next five years.
Commerce and Industry Minister Anand Sharma, who reiterated India’s commitment to a successful end to the Doha round of World Trade Organisation talks, said on Thursday he expects exports to reach $200 billion in the fiscal year ending March 2011.
India’s exports were $168.7 billion in 2008/09, but have been have been falling in annual terms since October as the global credit squeeze followed by recession in developed nations sapped demand.
Exports were down 31.3 percent in the quarter that ended in June 30 from a year earlier.
Outlining a trade policy for the five years ending March 2014, the minister said he expected exports of goods and services to double.
“We would like to achieve an annual export growth of 15 percent over 2010/11 with an annual export target of $200 billion by March 2011,” Sharma said.
“In the remaining three years of this foreign trade policy up to 2014, the country should be able to come back on the high export growth path of around 25 percent per annum,” he said, adding that the government’s focus would be on export sectors with high employment.
Since October, as the global downturn hit India harder than expected, the central bank has slashed interest rates and government offered tax breaks and interest subsidies to lift exports and prevent massive job losses.
Sharma said India would extend a tax refund scheme to December 2010 and extend other tax incentives for exporters to the end of 2010/11.
Exports grew at a rate of more than 20 percent annually between the 2004/05 and 2007/08 fiscal years, helping the economy post robust growth before the global downturn.
Exports contribute 17 percent to India’s gross domestic product, smaller than many other Asian nations.
The Doha round of world trade talks, launched in the Qatari capital in 2001, has made halting progress as WTO members squabble over calls to cut tariffs and subsidies to boost commerce in food, goods and services.