India likely to miss $200 billion export target: FICCI

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Staff Reporter | 16 Jun, 2008
India would not be able to meet the export target of $200 billion for 2008-09 fiscal due to various reasons such as surge in ocean freight rates, slowdown in the US and European markets, slack in construction and real estate business in Western markets and export restrictions in the domestic market, according to majority of exporters surveyed by the FICCI.

"An overwhelming 75 percent of companies participating in the FICCI's export survey feel that the export target of $200 billion for 2008-09 would be missed," stated FICCI in a release. It added: 323 export companies, with turnovers ranging from Rs 1 crore to Rs 20,000 crore, were surveyed.

The companies were from sectors such as automotive, consumer durables, food and food processing, leather, marine products, gems and jewellery, FMCG, textiles, handicrafts, metal and metal products, heavy engineering, IT, pharma and chemicals.

Ocean freight rates are seeing substantial increase and this is severely undermining the competitiveness especially for the long haul export orders, with some companies saying that their buyers in the US are increasingly sourcing from markets of Canada, Mexico and other Latin American countries, according to the report.

Simply put, foreign buyers are showing preference to source from closer production points to save on freight costs.

Exporters from some sectors such as mining and minerals, engineering industry have said that they have seen reduced demand for their products on account of slowdown in the construction industry in the US and the UK.

Companies from the textile and IT sector have cautioned about the future decline in demand in the export markets of the West.

Meanwhile, currency fluctuations continue to be an area of concern for exporters with regard to their near term performance despite depreciation of rupee since early 2008.