The Hindu Business Line : July exports up 18.5% in dollar terms

At a glance
Real effect of rupee appreciation can be seen only from Aug/Sept figures.
Jump in non-oil imports helped push up industrial growth
Trade deficit in April to July zooms to $25,619 million

G. Srinivasan

New Delhi, Sept 3 India’s exports continue to maintain high growth tempo despite the appreciating rupee vis-À-vis dollar, as export growth during July 2007 was 18.52 per cent in dollar terms at $12,494.11 million, against $10,542.14 million in July 2006.

Provisional figures released by the Department of Commerce based on data compiled by the Directorate-General of Commercial Intelligence & Statistics (DGCI&S) reveal that cumulatively, the country’s exports during the first four months of the current fiscal (April-July) registered a relatively healthy growth of 18.22 per cent at $46,797.61 million, against $39,586.71 million during the corresponding period of 2006.

Committed contracts

Senior officials of the Commerce Ministry told Business Line here that certain segments such as engineering, chemicals and pharmaceuticals have performed quite well, reflecting that the rupee appreciation has not halted their march, as they were able to compete in other components like quality, price and delivery schedule by improving their competitiveness.

When contacted the Commerce Secretary, Mr Gopal K. Pillai, said that the fact that there is not even a one per cent drop in export growth shows that the industry was resilient enough to ride out the repercussions of the rupee value appreciation against the dollar. He said that so far the real impact has not been felt because the exports that have been shipped were all committed contracts.

He said the real effect would be felt only when figures of August and September start coming up in the next few months. “At the end of September we will take a view on this as the position is not clear now. If August and September exports too show the same rising trend, then I would be happy,” he said.

Services tax exemption

Asked about the failure of the Finance Ministry to notify services tax exemption to exporters as announced in the foreign trade policy modifications, Mr Pillai said the Prime Minister has called a meeting in this regard.

Stating that the Ministry could only simplify procedures, Mr Pillai pointed out that available containers could move only 6 million TEUs, while the country needs 21 million TEU containers by 2015 if the current export trend persists, he said.

In rupee terms, exports touched Rs 50,493 crore during July 2007, which was 3.10 per cent higher than the value of exports during July 2006.

Oil imports up

Imports during July 2007 at $17,508.63 million show an increase of 20.40 per cent over July 2006 ($14,542.21 million), while cumulatively imports during April-July 2007 amounted to $72,417.47 million against $55,427.93 million, logging a growth of 30.66 per cent.

Oil imports during July 2007 at $5048.33 million were 8.75 per cent higher than $4642.31 million in July 2006, while cumulative oil imports during the first four months of the current fiscal amounted to $19,879.85 million, which is 5.33 per cent higher than such imports of $18,873.12 million in the corresponding months of the last fiscal.

Non-oil imports

Non-oil imports during July at $12,460.30 million were 25.86 per cent higher than the level of $9899.90 million in July 2006, while cumulative non-oil imports at $52,538.95 million in April-July 2007 were 43.73 per cent higher than the level of such imports valued at $36,554.82 million in April-July 2005.

The whopping growth in non-oil imports during the initial months of the current fiscal also helped in pushing up the industrial growth as most of the imports pertain to capital goods, intermediates and raw materials required by manufacturing industries, officials said.

Intriguingly, the Commerce Ministry has done away with the recent initiative of providing revised provisional figures for the previous fiscal which would have given a clearer picture of the current trends in export growth in relation to the past performance, trade policy analysts said.

As a result of high export growth and a higher import growth, trade deficit during the first four months of the current fiscal zoomed to $25,619.85 million compared with $15,841.22 million in the corresponding months of the previous fiscal.