Commerce Secretary S R Rao on Thursday said that overall trade deficit is a cause of concern. However, it won’t continue for long. It is expected that from January things will be better. Even in December there has been marginal reduction in deficit, said Rao. He said that the government has announced some additional support, including fiscal measures for boosting exports.
According to the Federation of Indian Export Organisations President Rafeeq Ahmed, the trade deficit will be somewhere between $40-$45 billion. India’s trade deficit in two months of October and November totalled nearly $40 billion.
Speaking to reporters after laying foundation stone for the final phase of the Aquatic Quarantine Facility in Chennai, Rao said that the WTO had projected a growth of 4.5 per cent in world trade and had scaled it down three times. The world trade is in a great recession with the forecast for present year not being bright. In order to tackle the problem, the government is looking beyond the US and Eurozone to find new markets for exports.
For instance, he said, the government is planning to double marine exports from $3.5 billion to $7 billion by 2015 and looking at new markets in Africa, West Asia and other countries. The secretary also said that this target cannot be reached by the government alone and they have to partner the public. “That is why we are in the process of devising schemes to ramp up PPP model.”
Expressing concern about the falling marine exports, Rao said, “The per kg realisation of marine exports dropped 7-8 per cent in terms of value while in terms of quantity it has increased during the present fiscal.” He attributed the drop mainly to the Dollar fluctuations.
According to Rao, “We need to get into more value-added products and that is the need of the hour.”
He said that one of the reasons for this was the sovereign debt crisis in the Eurozone that has contracted trade. That US is also not out of the woods yet and that is also compounding the problem, said Rao.