It seemed that as 2010 began, everywhere we looked there was recovery. Indian exporters, after hit hard by the previous year's storm, were looking forward to better times, a lot of which they have really seen later throughout the year.  Despite sluggish demand recovery in the key traditional markets like the US and Europe, exports continued to grow at an encouraging pace, raising hope that the trend would continue this new year.

Things are looking up not only for exporters. The Indian economy, as a whole, has done well too, with an impressive 8.9 percent GDP growth for the third quarter and an industrial output expected at around 10 percent in the current fiscal. Also, major stock market indices are ruling at the pre-recession level peaks and foreign investors are pouring heaps of funds into the economy. So far, so good, albeit with rising inflation.

Without a doubt, a number of economic indicators crossed expectation marks in 2010, as did exports too, but even so, it is not enough for exporters to become dithyrambic as a true world recovery still remains elusive, and more importantly, two of India's major export destinations - the US and the European Union - still spell uncertainty. Combined with it, mounting US protectionism and depreciation of the US Dollar and the Euro are two potential risks.   

According to Indian policymakers, market diversification could be a solution to do away with the over-dependence on the tradition markets. In fact, the government has been doing a lot to encourage this strategy since the announcement of Foreign Trade Policy 2009-14, but still for most exporters it is a good advice easy to ignore. The US and Europe are too lucrative, and more than just that, diversification is not good enough a strategy for them in the short-term.

However, it is a lesson learnt from the last recession that putting all egg's into one basket could be disastrous and therefore, the sooner the exporters realise the importance of diversifying exports away from dependence on traditional markets, the better it is. Demand recovery in the US and stability of the European economy are still not beyond question, and hence a diversified market strategy is still worth considering. Good opportunities abound in emerging markets like Latin America, Africa, and South and South East Asia.  

After the global recession, especially after the renewed slowdown in the western economies early last year, the world of global trade will be a very different place in the coming days. One of new trends, for example, is that a number of nations, including the US, the UK, and  Japan have turned to export-centred growth strategies - a move that signals to a more competitive environment in global trade in the coming days. Exporters must keep their eyes open to such developments of the global trade environment.  

Back to the exporters at home, the good news is that Commerce and Industry Minister, Anand Sharma has recently announced that more sops, just like the last year, will be rolled out in mid-January for some select export sectors that continue to languish in the global market. However, exporters' wish list for this New Year certainly includes many more, such as reduction in export credit rate, less red tape to bring down transaction costs, efficient return of service tax, and measures to bring down labour and raw material costs.

In the light of the government's newly set export target of US$ 400 billion by 2014, it could be expected that at least some of the challenges faced by the Indian exporters would be addressed this year. Also, experts believe that the recently signed FTAs with nations including New Zealand, Canada, Israel and ASEAN and some other trade pacts in the pipeline including those with the European Union, Japan, Russia, Malaysia, South Africa, Egypt and Turkey will allow more access to the Indian exporters in overseas market.     

Apart from the global trade scenario and adequate macro-level policy measures, what is equally important for exporters is to go back to the basics. In a post recession world, competition will be tougher everywhere, with both crisis and opportunities. Winners will be those who will put their thinking cap better and plan smart to bring the future into present to do something about it now.

There is a lot to look forward to in 2011.

(The author can be contacted at writu.kakati@gmail.com)