Deepen domestic reforms to push exports: Survey

New Delhi, Feb 27 (UNI) India needs to deepen domestic reforms to further accelerate exports in the long-term by removing constraints like infrastructural bottlenecks, rigid labour laws, SSI reservations and high transaction costs, says The Economic Survey, 2006-07.

Stating that deepening of domestic reforms was required to maintain the current dynamism in exports, the Survey calls for calibrated policy of phasing out export incentive schemes coupled with lowering basic custom duty and giving a more aggressive push to foreign direct investment (FDI) in export industries.

India has seen a significant jump in exports due to a host of favourable external developments and domestic policy initiatives as also improved global growth and recovery in world trade, opening up of the Indian economy and corporate restructuring.

The buoyancy of exports was driven by the resurgence in the manufacturing sector and sustained demand from major trading partners. "Trade policy reforms, continued trade promotion, market diversification and trade facilitation efforts seem to have paid good dividends," the survey notes.

To increase the rate of investment in the economy and infuse new technologies and management practices in these industries and thereby increase exports, the Survey plugs a more aggressive push to attract FDI in export industries.

Exporters need to look into non-price factors like product quality, brand image, packaging, delivery and after-sale services.

The country's imports grew by 36.3 per cent in April-December, 2006, largely due to the growth in POL imports at 39.2 per cent on account of high crude oil prices. Non-oil import growth decelerated to a moderate 18.7 per cent in first nine months of the current year, primarily because of high bullion prices leading to a decline in gold and silver imports in the first few months.

UNI