Sarabjit Kaur
The prospects of the country’s external sector look bright in the coming years as global trade is expected to increase, although rise in oil prices could create problems, the Economic Survey said on Monday. The survey for 2017-18 was tabled in Parliament on Monday by finance minister Arun Jaitley.
“The prospects for India’s external sector in this and coming year look bright with world trade projected to grow at 4.2 per cent and 4 per cent in 2017 and 2018, respectively from 2.4 per cent in 2016; trade of major partner countries improving and above all India’s export growth also picking up,” it said.
However, it added that the downside risks lie in the rise in oil prices.
But, it said, this could also lead to higher inflow of remittances which have started picking up.
“The supportive policies like goods and services tax (GST), logistics and trade facilitation policies of the government could help further,” the survey said.
The country’s merchandise exports during the April-December period of 2017-18 grew by 12 per cent to USD 223.51 billion as against USD 199.46 billion in the year-ago period.
During the nine-month period of the current fiscal, imports rose by 21.76 per cent to USD 338.36 billion, leaving a trade deficit of USD 114.85 billion.
The survey further stated that for the “first time in India’s history”, data on the international exports of states has been dwelt upon in the Economic Survey.
Such data indicates a strong correlation between export performance and states’ standard of living.
“States that export internationally and trade with other states were found to be richer. Such correlation is stronger between prosperity and international trade,” it added.
It has pointed out that five states – Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana – account for 70 per cent of the country’s exports.
Talking about services exports, it stated that although world trade volume of goods and services is projected to accelerate this year, “enhanced global uncertainty, protectionism and stricter migration rules would be key factors in shaping India’s services exports”.
India remained the eighth largest exporter in commercial services in the world in 2016 with share of 3.4 per cent. On the other hand, merchandise exports accounts for only 1.7 per cent of global shipments.
Moreover, the Economic Survey said that the country’s logistics industry which is worth around USD 160 billion is likely to touch USD 215 billion in the next two years with the implementation of GST.
“With the implementation of GST, the Indian logistics market is expected to reach about USD 215 billion in 2020, growing at a CAGR of 10.5 per cent,” Economic Survey 2017-18 said.
The Indian logistics industry which provides employment to more than 22 million people has grown at a compound annual growth rate of 7.8 per cent during the last five years, it said.
The Global Ranking of the World Bank’s 2016 Logistics Performance Index shows that India jumped to 35th rank in 2016 from 54th rank in 2014 in terms of overall logistics performance.
India has improved its rank in all the six components of logistics performance index, it added.
(With PTI Inputs)
