New Delhi, June 10: Exports need to grow 65 per cent over the next two years to achieve a target of $500 billion by 2013-14 set by the government.
Analysts and exporters aver that the target is unrealistic in the backdrop of the economic slowdown and a contraction in global trade. Shipments stood at $303 billion in 2011-12.
"The 20 per cent growth projected for 2012-13 through the incentives will make it an uphill task to take merchandise exports to $500 billion in 2013-14," Rafeeq Ahmed, president of the Federation of Indian Export Organisations, said.
However, the government is hopeful of meeting the target.
"The target is difficult but not impossible," Anup K. Pujari, director-general of foreign trade, said.
He said the government had set the target as part of the foreign trade policy (2009-2014) and taken a number of steps in the last three years to boost exports.
The measures have yielded results despite adverse economic conditions.
In the trade policy for 2012-13, the government has announced a slew of incentives. These include an extension of the 2 per cent interest subsidy scheme for labour-intensive sectors such as handlooms and handicrafts as well as for the export promotion capital goods scheme for zero-duty import of capital goods.
The policy focuses on market diversification by adding 14 focus markets under different schemes.
Last year, exports to Asia, Africa and Latin America amounted to $188 billion and constituted 62 per cent of the total export basket.
Aman Chadha, chairman of the Engineering Export Promotion Council, said, "If some of these measures were announced earlier or for a longer period such as the extension of interest subvention and zero-duty EPCG scheme the uncertainty in the minds of the exporting community could have been reduced and they would have been able to plan exports in a more efficient manner."
He said engineering exports needed a long-term policy as products were customised for consumers and the manufacturing time taken was long.
Huge trade gap
In 2011-12, the country's trade deficit peaked to $185 billion, while economic growth slipped to 6.5 per cent.
Commerce minister Anand Sharma faces a daunting task of not only arresting the ballooning trade deficit but also boosting exports in a global economy where shipments are likely to contract this year.
The World Trade Organisation (WTO) has projected a 3.7 per cent growth in global trade for 2012, down from 5 per cent in 2011 and 13.8 per cent in 2010.
The global economy has been losing momentum because of a number of reasons, which include the sovereign debt crisis in Europe.
"The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods," a WTO report said.