Mumbai: Rising exports to Asian markets, led by the UAE, China, Hong Kong and Vietnam will help push the India's outbound trade next fiscal, says an HSBC Trade report.
It, however, did not put a number to its growth projection or the target.
The report says merchandise exports (both imports as well as exports) will grow at an impressive average annual pace of 17 percent during 2013-15 and by 15 percent annually during 2016-20.
The report said HSBC bases its optimism to the faster and speedier growth of Asian economy than that of Europe and the US.
Apart from the largest partnet UAE, China, Hong Kong and Vietnam in particular are expected to considerably increase their share in the country's exports, says the HSBC Trade report.
After contracting for eight successive months, exports rose by 4.25 percent in Feburary, reflecting some recovery in the global markets, to USD 26.26 billion, said the Commerce Ministry yesterday.
In January, exports grew a poor 0.82 percent but outward shipments entered the positive zone after a long gap of eight months.
However, during the April-February period, exports contracted by 4 percent to USD 265.95 billion. Imports during the 11-month period grew by a mere 0.25 percent to USD 448 billion, leaving a trade deficit of USD 182.1 billion.
Last year, exports crossed USD304 billion, while imports crossed USD480 billion in the year.
"Intra-Asian trade is forecast to be a major driver not of the country's exports but for the entire regional trade growth as the Asian economy recovers faster than that of the Western economies. Therefore we see goods exports accelerate again in next fiscal," says HSBC India managing director and commercial banking head Sandeep Uppal.
He further says exports are expected to accelerate in the coming years as the country moves up the value chain into higher sectors such as transport equipment, chemicals and industrial machinery.
However, lower value-added sectors like wood and textiles, which employ a large part of unskilled workforce, will continue to generate a significant portion of export revenue, he added.
He also says the UAE will continue to be the country's largest single export market till 2030. The UAE already accounts for around 15 percent of the country's total exports as of FY12.
He further noted that the US is currently a very important market for the country, but is forecast to decline in relative significance as intra-Asian trade proves a more dynamic opportunity over the next two decades.
On the promising sectors for exports, he says natural resource-based sectors are currently of primary importance, including petroleum products like fuels, industrial lubricants and bitumen, and mineral manufactures like cement, brick, and glass products.
He also says mineral manufactures will continue to provide a strong and steady source of growth, supplying construction materials to the developing countries of the region, and absorbing the country's large unskilled workforce. This sector is expected to contribute around 15 percent of total export growth in the decade to 2030.
Another big forex earner will the passenger car and commercial vehicle sector, helping the transport equipment sector to contribute around 15 percent of total export growth in the decade to 2030.
Chemicals and industrial machinery are also seen providing a strong and steady source of forex revenue, with each contributing around 7-9 percent of growth out to 2030 as they gradually account for a higher share of trade, he concludes.