The government plans to set an export target of $500 billion for the next fiscal year. The target will be part of the five-year foreign trade policy which will be announced later this month.

“The export target of $500 billion for FY23 (2022-23) is being considered….seems like achievable given the performance in the current fiscal,” a senior commerce ministry official said.

Exports in the first 10 months of the fiscal (April-January) rose 45.8 per cent to $374.05 billion from $256.55 billion a year — providing sufficient grounds for optimism to meet the target of $400 billion set for this fiscal, while raising the bar higher for the next fiscal to $500 billion.

Analysts said the Russia-Ukraine conflict would not have a major impact on export as trade with the two countries is not significant.

The conflict does provide an opportunity for exporters to tap new markets.

India’s main imports from Russia include fuels, mineral oils, pearls, precious or semi-precious stones and nuclear reactors.

Exports include pharmaceutical products, electrical machinery and equipment, organic chemicals and vehicles.

Trade with Russia stood at $9.4 billion so far this fiscal year, against $8.1 billion in 2020-21. Russia accounted for less than 1 per cent of India’s total exports in the April-December period.

The conflict could boost exports from India of some items such as wheat. The US Department of Agriculture (USDA) in the Grain: World Markets and Trade report said wheat exports this fiscal would hit 10 million tonnes (mt) against estimates of 7mt.

Russia and Ukraine make up 30 per cent of global wheat exports. “In the new marketing year 2022-23 beginning in April, fresh supplies will be available in addition to the exceptionally large stocks in the country,” it said.

India supplies wheat to Bangladesh and West Asia. Exporters will now find markets across Africa and other parts of the Gulf region despite the transit time being higher compared with Russia and Ukraine.

“But India is well-positioned to step in as a low-cost supplier,” the USDA said.

Ukraine war gains

Why export target raised 25%: With two months to go to the end of the fiscal exports at $374bn just short of the target of $400bn. Policy makers believe this provides the ground for setting an ambitious target for next fiscal.

Will the Russia-Ukraine war hurt India: No, for two reasons. Neither Russia nor Ukraine is a major trade partner. Second, the disruption in the wheat market will benefit exporters. Projections for the fiscal have been raised to 10mt from 7mt.