India aims to double exports by 2014

India aims to double its exports to $450 billion by 2014 and will work on a four-pronged strategy to diversify and boost shipments out of the country. Commerce minister Anand Sharma unveiled a draft strategy paper for doubling exports and said exports will touch $225 billion in 2010-11, higher than the target of $200 billion. Sharma said the ministry’s strategy to boost exports would help keep the trade deficit within manageable limits. “One of the major reasons to take this initiative and put it (a strategy) in place on urgent basis is because of the widening balance of trade,” Sharma said. The ministry has sought comments from stakeholders by March 23. The paper shows that the trade gap, which stood at $89 billion during the first 10 months of 2010-11, may increase to around $115 billion for the entire fiscal and may further escalate to $278 by 2013-14. “With the initiative that we proposed in the strategic paper, we hope to close the (trade) gap and bring the gap to below 10% or may be close to 9% of GDP which in the view of those who manage the economy is perhaps achievable and also manageable,” Sharma said. The strategy paper calls for building on the strengths of engineering and chemicals, gems and jewellery, leather products and textiles. “It shall be our endeavour to ensure diversification of product base and move into high value-added products especially high-end fashion shoes in the developed world and similarly, in textiles, we would like to give focused attention on specialized niche markets which would add to our export potential,” Sharma said. The minister said attention should be focused on marine products and organic products for which new markets are emerging, particularly in the developed world. He said the government would prefer providing incentives for value addition for iron ore exports rather than export of the raw material. The second element of the strategy would be diversification of markets for the country's exports as developed countries are unlikely to witness any significant increase in demand. The focus now would be on penetrating markets in Asia, Africa and Latin America. “Therefore, in the last one-and-a-half years, we have stepped up our engagement with the countries of east Asian region after signing the free trade agreement with Asean, CEPA with Japan, Malaysia and Korea and we have initiated action for similar agreements with New Zealand and Indonesia,” the minister said. “With Europe, I am hopeful that in the next few months, we will see a conclusion of a deal and we would step up our deals with the Mercosur countries and the countries of African region,” he added. The government also intends to increase attention on R&D.