Current Affairs-Indian Economic Survey-2012-13:Economic Survey Acknowledges Benefits of Market Diversification

Economic Survey Acknowledges Benefits of Market Diversification

The Economic Survey presented by the Finance Minister, Shri P. Chidambaram in the Parliament today expressed satisfaction over the strategy of market diversification There has been significant market diversification in India’s trade. Region wise, India’s exports to Europe and America have declined to 18.7 per cent and 19.5 percent respectively in 2012-13 from 25.9 per cent and 24.7 per cent in 2000-01. On the other hand Export to Asia and Africa rose to 50.4 per cent and 9.6 per cent respectively from 37.4 per cent and 5.3 per cent respectively during the same period. There was a noticeable rise in the share of West Asia –GCC (Gulf Cooperation Council) countries from 14.9 percent in 2011-12 to 17.7 percent in 2012-13 (April- November) said the Survey. However, the Survey noted that “in terms of product diversification a lot more is needs to be done.” 

The Survey also noted the impact of exchange rate changes on export growth. It said that while Export growth in dollar terms was negative at - 4.9 in 2012-13 (April-January), it was positive in rupee terms at 9.1 per cent. Though, here too, there was a deceleration from the 28.3 per cent in 2011-12 (full year). 

The trade deficit of USD 167.2 billion for 2012-13 (April-January) was 7.9 per cent higher than the USD 154.9 billion during the same period in 2011-12. The survey attributes this to moderate export growth and high import growth, particularly in petroleum, oil and lubricants (POL) products. Demand contraction due to global economic conditions impacted India and export suffered. 

After touching the high point of 56.5 per cent growth in July 2011, India’s export growth started decorating with a sudden fall to single digits in November 2011 and then to negative territory in March 2012. Monthly export growth rates in 2012-13 (April- December) were negative except in April 2012. The survey notes the marginal revival to positive territory i.e. growth of export at 0.8 per cent in January 2013. The Survey said that the India’s exports to EU and China have been more negative during the recent slowdown then in 2009-10, while the performance to USA has been better for most of the sectors except gems and jewellery.