NEW DELHI: Despite headwinds, Indian exporters are looking at a 10-15% increase in goods exports, with some estimating overall exports to touch $900 billion this year, compared with around $780 billion during the last financial year.
In fact, exporters and govt were eyeing $900 billion exports last year as well, but weak demand in the developed market and a fall in commodity prices meant that goods exports fell 3% to $437 billion, while services exports rose 5% to $341 billion, according to commerce department’s estimates. Federation of Indian Export Organisations, the umbrella lobby group representing exporters, has estimated that during the current financial year, goods exports will rise to $500-510 billion while services exports will go up to $390-400 billion.
Healthy goods exports will also bolster industrial production and overall economic activity.
“Despite a very challenging geopolitical and consequent logistics disruptions and freight hikes, the demand for technology-driven products and services are very high and even for lifestyle goods, it is picking up, particularly from advanced economies assuring us for a much better performance this fiscal,” Fieo DG Ajay Sahai told TOI. Healthy goods exports will also bolster industrial production and overall economic activity.
There are, however, some concerns of a slowdown in services due to IT and IT-enabled services, given that growth moderated to a three-year low in 2023-24. While policymakers are looking to diversify beyond IT, telecom and business services, to newer segments such as tourism and healthcare, there is a demand for restoring the scheme to ensure that refunds taxes. Besides, executives at the Services Exports Promotion Council said there was a need for a stronger brand development in case of healthcare and tourism, where India was facing competition from countries that were seeing much higher footfalls.
On the goods side, exporters appear more confident and are putting in place a strategy to move away from traditional markets.
Garment exporters, for instance, are looking to tap into markets such as Mexico, Brazil, Poland and other east European countries as it seeks to diversify away from the US and Europe, its traditional focus areas, said Apparel Export Promotion Council chairman Sudhir Sekhri.
“We are putting emphasis on diversification as we expect it to pay dividends in the coming years, if not this year,” he said. AEPC is looking at a growth of around 10% to $16 billion, banking on a faster pick-up in the US and the signing of the much-awaited free trade agreement with the UK. “We are hoping that the Red Sea crisis will end and a change in the interest rate stance in developed countries will boost demand. There is good demand for more value-added products but demand for products at the lower and middle-end has been hit due to reduced purchasing power (due to inflation and higher interest rates in the West),” Sekhri told TOI.
Engineering exporters expect a 15% rise this year. “Demand in Europe is coming back, there is an improvement. Plus, there is good demand from countries such as the UAE and Australia, with which India has signed trade agreements. We are also seeing good traction in Gulf countries and FTAs with Oman, the UK and Chile will provide a further boost,” said EEPC India chairman Arun Kumar Garodia.
During the last financial year, engineering exports rose 2.1% to $ 109.3 billion and this year, the removal of restrictions on steel exports is expected to provide a thrust.
Similarly, Pharma Export Promotion Council’s Dinesh Dua is budgeting for a minimum growth of at least 10% to close the current fiscal year with $31-32 billion on strong demand from the US. Besides, he sees demand coming from Africa and Latin America and dismisses concerns over quality issues. “The problems have been associated with some of the smaller players and Steps taken by govt and some of the industry bodies will ensure that pharma exports maintain the quality that India is known for,” he said.
In fact, exporters and govt were eyeing $900 billion exports last year as well, but weak demand in the developed market and a fall in commodity prices meant that goods exports fell 3% to $437 billion, while services exports rose 5% to $341 billion, according to commerce department’s estimates. Federation of Indian Export Organisations, the umbrella lobby group representing exporters, has estimated that during the current financial year, goods exports will rise to $500-510 billion while services exports will go up to $390-400 billion.
Healthy goods exports will also bolster industrial production and overall economic activity.
“Despite a very challenging geopolitical and consequent logistics disruptions and freight hikes, the demand for technology-driven products and services are very high and even for lifestyle goods, it is picking up, particularly from advanced economies assuring us for a much better performance this fiscal,” Fieo DG Ajay Sahai told TOI. Healthy goods exports will also bolster industrial production and overall economic activity.
There are, however, some concerns of a slowdown in services due to IT and IT-enabled services, given that growth moderated to a three-year low in 2023-24. While policymakers are looking to diversify beyond IT, telecom and business services, to newer segments such as tourism and healthcare, there is a demand for restoring the scheme to ensure that refunds taxes. Besides, executives at the Services Exports Promotion Council said there was a need for a stronger brand development in case of healthcare and tourism, where India was facing competition from countries that were seeing much higher footfalls.
On the goods side, exporters appear more confident and are putting in place a strategy to move away from traditional markets.
Garment exporters, for instance, are looking to tap into markets such as Mexico, Brazil, Poland and other east European countries as it seeks to diversify away from the US and Europe, its traditional focus areas, said Apparel Export Promotion Council chairman Sudhir Sekhri.
“We are putting emphasis on diversification as we expect it to pay dividends in the coming years, if not this year,” he said. AEPC is looking at a growth of around 10% to $16 billion, banking on a faster pick-up in the US and the signing of the much-awaited free trade agreement with the UK. “We are hoping that the Red Sea crisis will end and a change in the interest rate stance in developed countries will boost demand. There is good demand for more value-added products but demand for products at the lower and middle-end has been hit due to reduced purchasing power (due to inflation and higher interest rates in the West),” Sekhri told TOI.
Engineering exporters expect a 15% rise this year. “Demand in Europe is coming back, there is an improvement. Plus, there is good demand from countries such as the UAE and Australia, with which India has signed trade agreements. We are also seeing good traction in Gulf countries and FTAs with Oman, the UK and Chile will provide a further boost,” said EEPC India chairman Arun Kumar Garodia.
During the last financial year, engineering exports rose 2.1% to $ 109.3 billion and this year, the removal of restrictions on steel exports is expected to provide a thrust.
Similarly, Pharma Export Promotion Council’s Dinesh Dua is budgeting for a minimum growth of at least 10% to close the current fiscal year with $31-32 billion on strong demand from the US. Besides, he sees demand coming from Africa and Latin America and dismisses concerns over quality issues. “The problems have been associated with some of the smaller players and Steps taken by govt and some of the industry bodies will ensure that pharma exports maintain the quality that India is known for,” he said.
