Exports are likely to have dropped 30% in May, their eighth straight fall, a senior official in the commerce ministry said on Wednesday. Overseas sales slid 33.2% in April, most in 14 years, to $10.74 billion from $16.08 billion a year ago.
In 2008-09, the country could not manage to achieve the target of $170 billion, which was revised downward from $200 billion in the light of weak global economy. The final figure for the year was $168.7 billion, a growth of 3.4% over the previous year.
?Exports are expected to have come down by 30% in May,? commerce secretary GK Pillai said here on the sidelines of a meeting between exporters and Commerce and industry minister Anand Sharma. The government is expected to release the official figures for the month early July.
The government expects exports to slide till August and is promising sops to bring the exporting sectors back in health. ?The uptrend is likely after August,? Sharma said after the meeting.
Sharma promised incentives to the labour-intensive sectors like textiles, gems and jewellery, and leather to sustain export performance of the last financial year. ?We will be meeting finance minister (Pranab Mukherjee) and will try that some of the demand are met in the budget. Sector specific incentives and packages would be there,? he said.
The minister said he would pitch for cut in interest rates by Reserve Bank of India (RBI) and banks in his meeting with the finance minister. He also said that the foreign trade policy, which will be introduced in August, will address the issues on high transaction cost for exporters.
For the current financial year, Sharma said, the government hopes to maintain the previous year?s level. ?That will be an improvement considering that the global trade is likely to shrink 9-11% this year. We will try to take it forward from there,? the minister said.
In their meeting with Sharma, exporters demanded reduction in interest rates to 7% or loans at 4% below the prime lending rates of banks combined with extension of subvention scheme till March 31, 2011. Exporters have also asked for income tax exemption for five years, creation of an export development fund with a corpus of Rs 5,000 crore, exemption from fringe benefit tax and service tax, integration of central and state taxes, and extension of National Rural Employment Guarantee Scheme to the exporting sectors. They have already put across their demand to the finance minister on Tuesday.
The government has doled out incentives worth more than Rs 1,800 crore to the exporting sectors through the three stimulus packages announced last year. The interim foreign trade policy also contained some sector specific measures and instruments.