Uptick in the global economy is likely to push the country’s exports further in the coming years, the Economic Survey today said.
“India’s exports appear to be recovering, based on an uptick in global economic activity. This is expected to continue…,” it said.
The Survey expects the global demand to go up, which in turn would fuel India’s exports too.
The Survey’s expectations assumes significance as the country’s exports have started recording positive growth since September, 2016. It was in the negative zone between December, 2014 and May, 2016.
“A strong export recovery would have broader spillover effects to investment,” it added.
It said that given the high elasticity of Indian real export growth to global GDP, exports could contribute to higher growth next year, by as much as 1 percentage point.
Further, the Survey said that given the country’s s need for exports to sustain a healthy growth rate, it is important to track India’s competitiveness.
Shipments to Europe, America and Asia increased by 2.6 per cent, 2.4 per cent and 1.1 per cent respectively in 2016-17 (April-November), while exports to Africa declined by 13.5 per cent.
It said that despite moderation in exports, external sector position has been comfortable, with the current account deficit (CAD) progressively contracting from USD 88.2 billion (4.8 per cent of GDP) in 2012-13 to USD 22.2 billion (1.1 per cent of GDP) in 2015-16.
“The improvement in exports appears to be linked to improvements in the world economy, led by better growth in the US and Germany,” it added.
Further, it said that if India aims to grow at 8 per cent for the next decade, it will require growth in exports of goods and services of 15 per cent.
(This article has not been edited by DNA’s editorial team and is auto-generated from an agency feed.)