April 8, 2006	Saturday	Rabi-ul-Awwal 9, 1427

NEW DELHI, April 7: India said on Friday it was aiming for 20 per cent growth in exports in 2006/07 as demand from traditional and new markets increased but analysts said it would have to step up infrastructure improvements to reach its goal.

Exports from India, Asia’s third-largest economy, crossed the $100-billion mark for the first time ever in the last financial year which ended on March 31, hitting $101 billion, Commerce and Industry Minister Kamal Nath said on Friday.

He told a business seminar exports grew 25 per cent on robust demand from traditional markets in the United States and Europe, while imports surged 32 per cent to $140 billion.

India is trying to upgrade its poor road network, congested ports and overloaded power sector. Analysts say this is necessary if the country wants to raise exports.

“It is not impossible to achieve the 20 per cent growth but infrastructure has to improve to sustain strong exports,” said Saumitra Chaudhuri, economic adviser to domestic credit rating agency ICRA.

Stronger exports have boosted the government’s confidence that India can double its share in global trade from just 1 per cent by 2009, although it falls far short of rival China, which had exports worth $55 billion in February alone.

“We have seen the trade winds changing. The centre of gravity of trade has shifted from the Atlantic Ocean to the Indian Ocean,” Nath said.

Exports account for nearly 10 per cent of gross domestic product and have bailed out the manufacturing sector during years of sluggish domestic demand.

Imports have risen on robust industrial output and as the fast-growing economy, estimated to have expanded at a rate of 8.1 per cent in the fiscal year 2005/06, sucked in more foreign goods.

Nath, unveiling a series of steps to boost trade, noted that rising exports had created 1.4 million jobs in 2004/05 and said exports could hit $165 billion by 2009/10.

Trade in services, which already constitute 52 per cent of GDP, exceeded $100 billion in 2005/06.

India’s gem and jewellery trade is its biggest exporter in value terms and Nath relaxed rules on jewellery exports, a move welcomed by the industry.

“This will not only boost exports by 20-25 per cent but will also pave the way for an increase in foreign direct investment in India,” said Bakul Mehta, chairman of the Gem & Jewellery Export Promotion Council.

India also will treat refuelling and supply of food and beverages for long distance flights as exports, entitling them to benefits under a government export promotion scheme.

These have emerged as a big business opportunity and many airlines currently replenish supplies or refuel in Thailand, Malaysia or Singapore.—Reuters