India’s trade
deficit could rise from 130.5 billion dollars in 2010-11 to 428.3
billion dollars by 2015-16 and become unsustainable with merchandise
imports rising from 380.9 billion dollars to 858.6 billion dollars,
industry body ASSOCHAM said today.
The imbalance likely to be above 180 billion dollars in 2011-12. While the share of manufactured goods in exports of China, Japan and Germany is very high, India’s share has declined from 44.1 per cent in 2000-01 to 37.5 per cent in 2010-11, according to a study by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The country’s merchandise exports during 2015-16 will stand at 430.3 billion dollars, up from 250.5 billion dollars in 2010-11 with exports of manufactured goods rising from 101.6 billion dollars to 119.6 billion dollars. Exports of petroleum products are set to rise from 41.9 billion dollars to
51.2 billion dollars in the same period.
On the flip side, said the study, oil imports will jump from 106.1 billion dollars to 243.7 billion dollars while gold imports will rise from 33.9 billion dollars to 83.3 billion dollars in the same period.
However, if capacity building of the industry takes place and competitiveness of Indian exports improves, then merchandise exports can stand at 549 billion dollars in 2015-16 and the trade deficit will be 309.6 billion dollars.
“There is need to curtail oil imports, or else there will be a severe burden on external payments position. The gold imports figure must also decrease by educating domestic investors and encouraging substitution of gold purchases with alternatives from formal financial sector which will help in increasing the productive capacity of economy,” said ASSOCHAM secretary general D.S. Rawat while quoting the study.
It is thus critical to enhance manufacturing capabilities along with improvement in technological content of products which should translate into sharpening the export competitiveness and gaining a price advantage. Promotion of international trading houses will help develop strong international linkages.
The study said growing uncertainties in the Eurozone, slowdown in advanced economies and weakening of the domestic had adversely impacted India’s external sector outlook.
Adverse global conditions and protectionist attitude being adopted by various western countries may lead to further drop in service exports, further decreasing the invisibles contribution to current account.
ASSOCHAM said India’s capital account rose almost seven times from 8.5 billion dollars in 2000-01 to over 57.3 billion dollars in 2010-11 with foreign investments being a major contributor. In times of global uncertainty, it is very much likely that foreign investors pull out their money from India and take it back to their home countries.
“Poor regulations, inefficient processes and inconsistency of policies may also deter potential foreign direct investments,” it said.
The imbalance likely to be above 180 billion dollars in 2011-12. While the share of manufactured goods in exports of China, Japan and Germany is very high, India’s share has declined from 44.1 per cent in 2000-01 to 37.5 per cent in 2010-11, according to a study by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The country’s merchandise exports during 2015-16 will stand at 430.3 billion dollars, up from 250.5 billion dollars in 2010-11 with exports of manufactured goods rising from 101.6 billion dollars to 119.6 billion dollars. Exports of petroleum products are set to rise from 41.9 billion dollars to
51.2 billion dollars in the same period.
On the flip side, said the study, oil imports will jump from 106.1 billion dollars to 243.7 billion dollars while gold imports will rise from 33.9 billion dollars to 83.3 billion dollars in the same period.
However, if capacity building of the industry takes place and competitiveness of Indian exports improves, then merchandise exports can stand at 549 billion dollars in 2015-16 and the trade deficit will be 309.6 billion dollars.
“There is need to curtail oil imports, or else there will be a severe burden on external payments position. The gold imports figure must also decrease by educating domestic investors and encouraging substitution of gold purchases with alternatives from formal financial sector which will help in increasing the productive capacity of economy,” said ASSOCHAM secretary general D.S. Rawat while quoting the study.
It is thus critical to enhance manufacturing capabilities along with improvement in technological content of products which should translate into sharpening the export competitiveness and gaining a price advantage. Promotion of international trading houses will help develop strong international linkages.
The study said growing uncertainties in the Eurozone, slowdown in advanced economies and weakening of the domestic had adversely impacted India’s external sector outlook.
Adverse global conditions and protectionist attitude being adopted by various western countries may lead to further drop in service exports, further decreasing the invisibles contribution to current account.
ASSOCHAM said India’s capital account rose almost seven times from 8.5 billion dollars in 2000-01 to over 57.3 billion dollars in 2010-11 with foreign investments being a major contributor. In times of global uncertainty, it is very much likely that foreign investors pull out their money from India and take it back to their home countries.
“Poor regulations, inefficient processes and inconsistency of policies may also deter potential foreign direct investments,” it said.
This comment has been removed by the author.
ReplyDelete