Exports may rise 12-15% to cross $500 billion this fiscal: FIEO

The country's merchandise exports are expected to increase about USD 60-70 billion to USD 500 billion by the end of FY25 on account of gradual improvement in global demand, apex exporters' body FIEO said on Thursday. In 2023-24, exports dipped over 3 per cent to USD 437.1 billion.

Federation of Indian Export Organisations (FIEO) President Ashwini Kumar also said the country's services exports are also likely to reach USD 390-400 billion this fiscal.

"We are looking for merchandise exports between USD 500-510 billion in 2024-25. In the services, we expect exports to be around USD 390-400 billion for the current fiscal," Kumar told reporters here.

He said traditional markets like the US and Europe will help boost India's exports. Sectors such as electronics, electricals, engineering, and pharma will play a key role in boosting shipments.

However, the new President said they are concerned as labour-intensive sectors like knitted and woven garments, footwear, gem and jewellery are doing good. In the footwear sector, while global imports grew at a CAGR of 5 per cent, India's exports contracted.

"The focus on skilling is still lacking as per piece production in many segments is much less as compared to Vietnam, Indonesia, Bangladesh, Cambodia," he said.

He suggested that the government address certain issues such as credit flow, interest subsidy and set up e-commerce hubs in the country to provide a cushion to the exporting community.

The share of export credit in the net bank credit is extremely low and not commensurate with the share of India's exports in the GDP, which is over 20 per cent, he said.

"The demand for the credit has gone up with rising inflation, high commodity prices and abnormal increase in sea as well as air freight," he added.

With the longer voyage time, on account of diversion of cargo through The Cape of Good Hope, coupled with slow offtake from the shelves, the buyers are also taking longer time to remit export proceeds necessitating higher credit for a longer period.

"This requires additional flow at most competitive rates," he said, adding, "We are proposing to create an Export Development Fund to assist exporters, in undertaking export promotional activities".

For this, a budgetary support equivalent to 1 per cent of preceding year's export in Indian rupee can be made available every year through the budget grant to the department of commerce.

He also said that huge potential is there to boost exports by about USD 250-300 billion by 2030 through e-commerce medium. "Let us explore the potential of social media like Facebook, Instagram, etc, for promoting e-commerce exports," Kumar said.