India to miss export target this year

India is likely to miss its export target this year, according to the latest numbers released by the government.

At the same time, India’s goods-trade deficit is likely to be 50% over its target of $120 billion.

According to the latest numbers, exports in February were US $24.6 billion, up just 4.3%.

With one month left to go, total exports are just $267.4 billion, about $33 billion short of the full year target of $300 billion. March exports are likely to be between $18-$25 billion, going by earlier trends, putting the full year figure short of the target by about $10 billion.

Last year, India achieved exports of $245 billion, up 37.5%.

In comparison, exports so far this year are up only 21.4% compared to 2011-12.

With this, India’s long term goal of taking exports to $500 billion by 2013-14 seem to be in shambles.

“If it (India’s exports) is going to be $220 billion (by the end of 2010-11), then setting a target of $400 billion is ridiculous … implicit rate of growth will be of the order of 27-28 per cent. India is targeting $500 billion worth of exports by the end of 2014,” commerce secretary Rahul Khullar had said a year ago.

The second area of concern is the rising imports, pushing up the goods-trade imbalance. Against $104 billion last year, and a target of $120 billion, the difference between India’s exports and imports have already hit 166.8 billion in the first 11 months.

The booming trade deficit puts pressure on India’s foreign exchange reserves, essential to protect the country in case of emergencies and meet the demands of any large-scale withdrawal foreign investment from the country.