While most industrial sectors expect a negligible growth or contraction in exports during 2009-10, pharmaceutical exporters forecast a 16 per cent increase, a survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) revealed.
While five of the 11 sectors surveyed expect no expansion in exports, three expect modest growth of up to 5 per cent. In fact, 61 per cent of the respondents felt that overseas sale of Indian goods would either contract or remain flat in the year.
Apart from a dip in orders from the US and the EU, exporters say demand from others like West Asia, the Association of Southeast Asian Nations (Asean) and Japan is declining at a faster pace.
Pharmaceutical exports from the country are expected to buck this trend and post a 13 per cent increase in overseas sale, the survey said. This could be because of lesser presence of Chinese pharma companies in the international market. And, expenditure on medicines is relatively inelastic to changes in income levels. However, the expected growth will be lower than the 23 per cent export growth in 2008-09.
The World Trade Organisation in a recent report had forecast a 9 per cent contraction in global exports, the sharpest fall since World War II. In this backdrop, Commerce Secretary Gopal K Pillai had recently said India’s exports in the current fiscal would be at the same level as in the just-ended financial year 2008-09.
About half the respondents in the survey told FICCI that the depreciation of the rupee against the dollar has had only moderate impact on their earnings. A depreciating exchange rate against the greenback increases rupee earnings of exporters, and also makes Indian goods cheaper in foreign markets.
Even in 2008-09, many exporters felt their overseas sales would be weak. Handicrafts and marine product segment expect exports from their sectors to contract by a fourth.
Sectors which are expected to witness an expansion in exports of more than 10 per cent include engineering goods, pharmaceuticals, rubber manufactured goods as well as glass and ceramics.
Final exports on exports will be known by May 1, when the commerce ministry will release the export figures for 2008-09. In the 11 months up to February, overseas sales of Indian goods increased 7.3 per cent, against 23.7 per cent in the same period of the previous year.