This is a welcome development after a deceleration of three years. The 1998-99 oil import bill is likely to touch $8.5 billion. The commerce ministry, made anxious by the dismal slowing down of exports, was cautious about setting a target of 18 per cent for the current fiscal, but it has now been emboldened by the rise in exports.

Many may argue that the exports only look impressive because of the low base. This is not true. Traditional segments such as gems and jewellery, cotton yarn, fabrics, readymade garments and transport equipment and chemicals have shown a significant improvement. The depreciating rupee, low inflation, world demand picking up, a revival of the South East Asian economies, have all contributed to the high export growth. The revival in domestic demand and large-scale restructuring appear to have helped the industrial sector improve capacity utilisation and cost competitiveness, aided by a recovery of world prices.

The real question is: can India sustain the export growth in the absence of a pick-up in non-oil imports, necessary for growth? The removal of quantitative restrictions on imports on a large number of items may marginally push exports. What India needs to do is try and improve its competitive strength and take advantage of the favourable world trade environment predicted by the World Trade Organisation.

India needs to adopt strategic export planning like expanding the export basket, removing artificial restrictions on agro exports and cutting the reserved list for the small scale sector. Good infrastructure and adequate finance are needed to help exporters. Merely copying the Chinese Shenzen model is not a solution for the long run. The government will have to remodify existing policies and bring in more transparency to maximise exporter's benefits.

The Exim policy has made a beginning by copying the Chinese Shenzen model. Export Processing Zones have already been granted Special Economic Zone status. Better late than never. But what India should try and do at the moment is to restructure its trade basket and include in it new revenue- generating items. Services today are the biggest revenue-generating pocket in exports. Sadly, India has been ignoring this aspect for a long time. The Chinese have surged ahead despite a communist set-up only because of their growth-oriented export policies. Eighty per cent of the FDI China attracts is in the export sector which is highly revenue promoting. FDI here is getting absorbed into infrastructure where there is a scarcity of funds and no additional revenue is being generated.