The government will provide stimulus measures to absorb the impact of moderation in exports following a rating downgrade of the United States by Standard & Poor’s, minister for commerce and industry Anand Sharma said on Thursday.
However, the current volatility in global markets seems to be a temporary turbulence and Indian exports should grow more than 25 per cent in the current financial year 2011-12, he said while releasing The Associated Chambers of Commerce and Industry of India’s (ASSOCHAM) Africa manual titled Opportunities Unlimited.
“There is no question on wavering on economic reforms. We have taken many initiatives in the past. The government will ensure that cost of credit to the industry is within manageable limits,” said Sharma. “India is carefully monitoring the deepening global economic crisis but the situation has not reached a stage for us to become anxious.”
Despite uneven and wobbly recovery in the US and uncertainty in the European Union, India’s merchandise exports rose by 38 per cent to $246 billion last fiscal. The minister hoped the figure will nearly double to $500 billion by 2014.
India generated foreign direct investments totalling $14 billion in the first quarter (April to June) of 2011-12.
On August 5, Standard & Poor’s downgraded credit of US debt from AAA to AA+ with a negative outlook. Industry leaders say a slow pace of recovery in the United States and the Eurozone could prompt hard hit sectors in India to call for a stimulus package to boost investments and demand. The United States is India’s biggest trade partner in goods and services combined.