The Hindu Business Line : Export growth sees slowdown in March

New Delhi May 1 Though India's exports in 2006-07 were almost on target at $124.6 billion, there has been a pronounced slowdown in export growth rate in March 2007 when exports grew by 9 per cent at $15.38 billion.

Provisional figures compiled by the Directorate-General of Commercial Intelligence & Statistics (DGCI&S) show that the cumulative value of India's exports during April-March 2006-07 was $124.6 billion as against $103.06 billion revised figure of 2005-06, showing a growth rate of 20.93 per cent. However, if the provisional figure of 2005-06 at $100.60 billion is compared to the provisional figure of $124.6 billion for 2006-07, the export growth for the last fiscal is 23.88 per cent.

Rupee increase

Officials in the Department of Commerce concede that the rupee appreciation in recent months, especially since August 2006, against the US dollar in which most of the Indian exports are denominated is now running at 10 per cent.

Besides causing jitters to the exporters as they increasingly realise lower unit values for their exports, the appreciation is threatening to be a real party-pooper, exporters say.

They said that two major items, engineering goods and petroleum product exports together had pulled up the overall export growth throughout the year, though the petroleum price moderation in the course of last fiscal has impacted on earnings from exports of petroleum products to some extent.

Trade policy analysts told Business Line here that if these two items are taken out of the export basket, the growth rate of the rest of the products is around 13 per cent only, which is a cause for concern. They, however, point out that since there was a robust growth in the world economy last fiscal with Indian exports diversifying into new products and new markets, the harsh effect of the rupee appreciation vis-à-vis the US dollar was somewhat cushioned.

But officials maintain that Indian exporters have succeeded in penetrating Far East and Japan, besides the Commonwealth of Independent States (CIS) last fiscal and that is why in the annual supplement to the Foreign Trade Policy announced last month more products and more countries were brought under the Focus Product and Focus Markets to cash in on the emerging trends.

Imports

On the import front, the cumulative value of India's imports during 2006-07 was $181.3 billion, which was 29.33 per cent higher than imports at $140.2 billion. However, the revised and final figure of imports for 2005-06 is estimated at $143.33 billion. Imports during the month of March 2007 were valued at $16.38 billion compared with $13.81 billion.

Crude oil imports at $4,597.64 million in March 2007 as against $4,202.92 million in March 2006 showed a growth of 9.39 per cent. Crude oil imports during 2006-07 full year were at $57,271.10 million, higher than imports valued at $43,951.27 million in the fiscal 2005-06.

Trade deficit

Non-oil imports in March 2007 at $11,785.30 million were 16.55 per cent higher than growth on such imports at $10,111.47 million in March 2007. Cumulatively, non-oil imports during 2006-07 at $1,24,097.15 million were 24.75 per cent higher than the level of such imports valued at $99,481.88 million in 2005-06.

A matter of concern in the foreign trade front as a result of high export and higher import growth is that the trade deficit during the fiscal 2006-07 has shot up to $56.73 billion from a level of $39.63 billion in 2005-06.

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Export growth sees slowdown in March