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Follow UsNEW DELHI, INDIA: The government will provide stimulus measures to absorb the impact of moderation in exports following a rating downgrade of the United States by Standard & Poor's, minister for commerce and industry Anand Sharma said on Thursday.
However, the current volatility in global markets seems to be a temporary turbulence and Indian exports should grow more than 25 per cent in the current financial year 2011-12, he said while releasing The Associated Chambers of Commerce and Industry of India's (ASSOCHAM) Africa manual titled Opportunities Unlimited.
Also read: FICCI Survey on Exports - July 2011
“There is no question on wavering on economic reforms. We have taken many initiatives in the past. The government will ensure that cost of credit to the industry is within manageable limits,” said Sharma. “India is carefully monitoring the deepening global economic crisis but the situation has not reached a stage for us to become anxious.”
Despite uneven and wobbly recovery in the US and uncertainty in the European Union, India's merchandise exports rose by 38 per cent to $246 billion last fiscal. The minister hoped the figure will nearly double to $500 billion by 2014.
India generated foreign direct investments totalling $14 billion in the first quarter (April to June) of 2011-12.
Also read: India's Exim Policy 2010 - 2011
On August 5, Standard & Poor's downgraded credit of US debt from AAA to AA+ with a negative outlook. Industry leaders say a slow pace of recovery in the United States and the Eurozone could prompt hard hit sectors in India to call for a stimulus package to boost investments and demand. The United States is India's biggest trade partner in goods and services combined.
“We live in an inter-connected world. There will be some impact on other regions. But India remains a potentially good growth story with a strong domestic market driven by 1.2 billion people. The GDP will continue to grow at a rate of eight per cent as it rests on robust fundamentals,” Sharma said.
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Meanwhile, Dilip Modi, president of ASSOCHAM, said the country should expand trade ties with Africa. With a combined population of two billion people, both regions are among the fastest growing.
“The bilateral trade which stood at $41 billion in 2007-08 (with India’s exports valued at $16 billion and imports at $25 billion) has the potential to cross $50 billion this year. India’s engagement with Africa cover an entire spectrum of activities like investment collaboration, technology transfer and skill development,” he said.
“Indian businesses are seeking tie-ups in agriculture, industries and services with African counterparts — especially in areas of food processing, pharmaceuticals, petrochemicals, bio-technology, information technology, fertilisers and infrastructure,” he added.