Services exports are also not exhibiting buoyant trends with the market share falling from 3.2 per cent in 2011–12 to 3.1 per cent in 2013–14. The prospects of a sluggish global economic recovery may pose challenges for India to achieve significant export growth acceleration in the coming years whereas supply-side constraints could dampen the price responsiveness in the short-term.
In the backdrop of uncertain global demand, the challenge for the country would be to search for new markets and new products for existing markets besides addressing the issues relating to competitiveness of Indian exports. 14. As we have seen in the past, capital flows are usually susceptible to periodic phases of sudden stops and/or reversals which can put downward pressure on Rupee.