The government has to seriously address bottlenecks in domestic industry,especially in sectors such as coal,fertilisers and edible oil,to check the tyranny of rising imports,according to the department of commerce.
Briefing reporters after releasing trade data for the full year 2011-12,Commerce Secretary Rahul Khullar said while his ministry would make all efforts to boost exports,it would require decisions on policy to increase the output of coal and edible oil. Coal imports expanded significantly. Now it requires decision on the domestic policy front, he said.
Coal was the seventh biggest item in Indias import basket in 2011-12. But,in terms of percentage increase over the previous year,coal imports showed the highest jump of 80.3 per cent to touch $ 17.6 billion. Of the total imports of $488.6 billion (up 32.1 per cent) last financial year,the top three imports petroleum and oil products $155.6 billion (up 46.9 per cent),gold $61.5 billion (up 44.4 per cent) and electronic machinery $35.4 billion (up 27.7 per cent) accounted for more than half or 51.67 per cent.
What is causing worry in the government is the rising trade deficit that has ballooned to $184.9 billion,up 56 per cent compared with 2010-11. The widening balance of trade is a matter of grave concern and poses serious challenges for the economy, Khullar said. During 2011-12,exports crossed $300 billion to touch $ 303.7 billion,registering an increase of 21 per cent over the previous year. The current account deficit,given the huge trade deficit,is likely to be around 4 per cent of GDP in 2011-12,Khullar said.
The global slowdown has hit Indias exports which lost its fizz since November,when it dipped for the first time compared with November 2010. It grew in single digits over the next three months,and again dropped over 7 per cent to $28.7 billion in March 2012. Given the sluggish pace of growth in world output,India needs to work harder to promote its export in the current year.
From our perspective,we need to see a much stronger effort to promote exports,especially because the global environment is not friendly, he said.
Khullar did not see good prospects for exports this year too. He said the the current fiscal would be a difficult year for exporters given the waning global demand and added that the government would have to take decisions on domestic policy front to rein in imports.
Experts,however,believe that the government should focus more on promoting exports rather than curbing imports because as the economy grows,the demand for oil and other commodities will gallop.