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Indian Exports May Hit USD 100 Billion in a Month
 

Moving in line with long-term goal of doubling India’s share of world’s trade in 5 years, going by recent export trends, value of Indian exports would be close to the USD 100 billion mark. Indian exports grew year-on-year at 26.3% and are valued at USD 88.7 billion.

Indian imports outpaced exports crossing the USD 100 billion mark in 2004-05 and continue to create a larger trade deficit estimated to be USD 37.5 billion this year compared to USD 24.7 the previous year. Value of imports has been on a sharp increase due to higher oil prices, which registered a 49.3%, jump this year amounting to USD 39.6 billion compared to USD 26.5 billion a year ago. Total Indian imports are valued at USD 126 billion compared to USD 95 billion a year ago a rise of 33%.

Non-oil imports also registered growth of 21.3% and estimated at USD 86.6 billion although it gives India a marginal trade surplus when oil imports are not considered.
 

The high-powered Board of Trade (BoT) chaired by Industrialist Kumaramangalam Birla recommended that taxes and levies on goods must not be exported and exporters must be rewarded with an abolition of these levies on exported goods. The BoT also complained on the 4% service tax introduced in the recent budget and Commerce Minister Kamal Nath has promised ways to nullify this tax. He also hinted at plans to announce specific incentives for products to specific areas. The Government has identified textiles, toys, leather, gems and jewelry, sports goods, stationery, and processed goods as priority areas for growth.

Meanwhile 70 countries will meet in Geneva next month to discuss trade. World Trade Organization (WTO) talks collapsed last week in London when 5 prominent members—the US, European Union, Japan, India, and Brazil failed to achieve a breakthrough in the discussion of modalities to further the Doha Development Agenda (DDA). Developed nations were pushing for major concessions from developing nations on non-Agricultural market access while the developing nations were seeking for sharp reduction in agricultural subsidies from developed nations. The link between the two issues was established in December 2005 at the Hong Kong Ministerial meeting. If this logjam is not cleared, the July 31 deadline to get a draft to improve services access will be missed and will have a disastrous cascading effect on the Oct 31 deadline for final draft on service access and Dec 31 deadline to conclude DDA negotiations.

This is not good news for India, which is trying to gain access to agricultural, industrial, and service access to markets in developed nations.