Trends and Prospects

Exports are the major focus of India's trade policy. The export sector is a core sector in the economic growth of the country and is important for addressing macro economic concerns. The incentives offered by the export promotion package is comparable to that of any other country. The focus remains on inducing the foreign investors to set up export oriented units in India. India offers a production base for foreign markets around the world for sourcing components and products manufactured at a low cost.

Export growth has shown a downward trend since the year 1996. Export growth during April-February 1997-98 is placed at 2.63% in dollar terms over that of the corresponding period in 1996-97. The 1997 figures stand at only 4%.

The performance in the current fiscal year (1997-998) has been erratic - there was a sharp decline in the first quarter, which was somewhat reversed in the second quarter, again to slow down in the third quarter with a slight improvement noted in the month of February 1998. The slow growth may be attributed to both domestic and international factors besides sectorial problems and difficulties. The amendments to the Exim policy announced by the Government in April 1998 have been framed keeping in view the fact that it would take some time to achieve high growth.

Opportunities
India's strategic location, between Middle East and South East Asia, presents itself as a country with immense business opportunities. Its neighbors include Pakistan, China, Nepal, Sri Lanka and Bangladesh. The countries labor advantage adds to this. India has vast reserves of technical and scientific manpower, backed by engineering and management institutes of excellence. India's skilled labor is in great demand in the world's premier organizations. Both skilled and unskilled labor is easy to find and wage rates are highly competitive compared to international levels. Language is not a barrier as the professional work force is conversant in English and the main transactions and procedures are done in the same language. The government also provides a number of incentives and facilities for exporters. India's rich resource and production base provides significant opportunities for investors to establish export units.