The mechanical, thermal as well as electrical properties of composite materials can be tailored to suite their use in specific applications. This adaptability has resulted in extensive use of these materials in manufacturing of industrial, aerospace, sports and household items. The role of accurate knowledge of the mechanical properties of these materials, in improving the product quality and reliability, offers strong motivation for research as it can bring down the product cost by improving design and manufacturing practices. Recent efforts towards the characterization of elastic response of the long fiber composites, or laminates, have seen a shift towards inverse identification techniques. The current research proposes application of a novel technique for inverse identification of the elastic moduli of transversely isotropic laminates. Two-dimensional Digital Image Correlation (2D-DIC) is used for full-field measurements which are required for the identification process. However, instead of the usual application of 2D-DIC for measurement of in-plane displacements, the pseudodisplacements resulting from out-of-plane (towards camera) deflection of plate under application of a point load are measured. These pseudo-displacements are basically the perspective projection of the three-dimensional displacement fields on the image-plane of the image acquisition system. The cost function in this method is defined in terms of these projections instead of the true displacements – and hence the name Projected Finite Element Update Method (PFEUM). The identification proceeds by iteratively minimizing the cost function by changing the material properties defined in the FE model. A sensitivity-based approach which predicts and explains the accuracy of material parameter identification for a composite plate using the PFEUM technique is also proposed. It is shown that the contribution of a specific material parameter in the observed displacement field influences the accuracy of its identification. The contributions from material parameters are first quantified in terms of sensitivity criterion which may be tailored by changing the elements of test configuration like location of supports, the load application point and the specimen geometry. Several test configurations are designed by maximizing the sensitivities corresponding to individual material parameters. The relevance of proposed sensitivity criterion in these configurations is then validated through material identification in simulated experiments with added Gaussian noise. Finally, a CFRP plate with 2mm thickness is tested under these configurations to demonstrate the practical use of this approach. The proposed approach helps in robust estimation of the inplane elastic moduli from a bent composite plate with a simple 2D-DIC setup without requiring measurement of the actual plate deflection or curvatures. The results are achieved with comparatively simple experimental setup and without application of the high-priced displacement measurement techniques thus resulting in cost savings.