The Hindu Business Line : Export growth slows in Aug — April-Aug trade deficit zooms to $6,044.68 m

CONTRARY to the salutary export trends noticed throughout last year, exports during the first five months of the current fiscal have registered a moderate growth of 9 per cent and a relatively meagre growth of 4.19 per cent during August, the latest month available.

Provisional foreign trade figures compiled by the Directorate of Commercial Intelligence and Statistics (DGCI&S) show that India's exports during April to August 2003-04 are valued at $22,504.70 million, which is 8.99 per cent higher than the level of $20,648.49 million during the corresponding months of 2002-03.

Exports during August are valued at $4,560.34 million, which is 4.19 per cent higher than the level of $4,376.97 million during August 2002.

On the other hand, the country's imports during April to August 2003-04 are valued at $28,549.38 million representing an increase of 22.14 per cent over the level of imports valued at $23,373.86 million in April to August 2002-03.

Imports during August 2003 are valued at $5,613.68 million, representing an increase of 15.48 per cent over the level of imports valued at $4,861.37 million in August 2002.

In view of the higher growth of imports and relatively modest growth in exports through out the first five months of the current fiscal, the country's trade deficit zoomed to a disconcertingly higher level of $6,044.68 million for the period under review, as compared to $2,725.37 million during April to August 2002-03.

An analysis of import basket shows that oil imports during April-August 2002-03 are valued at $7,663.14 million which is 7.92 per cent higher than oil imports valued at $7,100.67 million in the corresponding period last year.

Non-oil imports during April to August 2003-04 are valued at $20,886.24 million, which is 28.35 per cent higher than the level of such imports valued at $16,273.19 million in April to August 2003-04.

Considering the overall target of 12 per cent set for the current fiscal, officials in the Commerce Ministry are not unduly perturbed over the first five months export performance, though the latest month export growth was sluggish enough to raise concerns.

Though officials do not openly concede, the exporters point to the near trebling of trade deficit during the first five months to the slump in exports, triggered off by the appreciation of the rupee vis-à-vis the US dollar.

Exporters contend that as a consequence of creeping appreciation of the Indian rupee, the competitiveness as well as profitability of the exporters have been seriously undermined.

With imports becoming cheaper, the domestic companies, inured to procuring goods indigenously, are increasingly looking to overseas markets for sourcing raw materials and intermediates and this too played a no small part in pushing up the country's import bill as also import growth.

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