The Hindu Business Line : Sept exports rise 4.31% in Re terms; imports down

New Delhi, Nov 1 Even as export growth in rupee terms in September 2007 was 4.31 per cent higher than the comparable period of 2006, import growth in September 2007 nosedived by 10.51 per cent, reflecting the slackening appetite of industry for import of capital goods and consumables for export production.

Provisional figures of foreign trade released by the Department of Commerce show that the country’s exports during September 2007 were valued at $12,796.61 million which was 19.26 per cent higher than the level of $10,730.34 million during September 2006. In rupee terms, exports touched Rs 51,621.52 crore, 4.31 per cent higher than the value of exports during September 2006.

Cumulative value of exports during the first half of the current fiscal was $72,280.60 million (Rs 2,95,233.05 crore) against $60,985.84 million (Rs 2,80,275.27 crore), registering a growth of 18.52 per cent in dollar terms and 5.34 per cent in rupee terms.

Imports, on the other hand, were valued at $17,217.65 million representing a meagre increase of 2.31 per cent over the level of imports valued at $16,828.82 million in September 2006. In rupee terms, imports declined by 10.56 per cent.

Cumulative value of imports for the period April-September 2007 was $1,09,204.43 million (Rs 4,46,520.86 crore) against $8,70,110.23 million (Rs 3,99,815.04 crore), registering a growth of 25.51 per cent in dollar terms and 11.66 per cent in rupee terms during the same period last year.

Rupee fallout

When contacted about the paradox of the sustained growth in exports of close to 20 per cent in the first half of the current fiscal against the appreciating rupee, the Commerce Secretary, Mr Gopal K. Pillai, told Business Line here that he had been indicating that the adverse fallout of the appreciating rupee would be felt increasingly in the second half of the current fiscal as the exporters were executing orders contracted in the previous months.

Mr Pillai said that he has been “worried” over the problems plaguing the exporters in terms of the erosion of their profitability in the wake of the exchange-rate induced crisis. He said that the recent handicrafts fair held in the Capital drew export orders of only Rs 500 crore against the past three years trend of Rs 1,500 crore a year. The problem facing textile industry is acute in that some units have closed shops for want of orders, as in the case of a unit in Vadodara.

Non-oil imports down

Mr Pillai said the dismal import growth rate also owes itself to the reluctance of industry to import capital goods, intermediates and consumables for export production. According to Mr Pillai, exports during the current fiscal would touch at best only $140 billion, given the unrelenting pressure of rupee appreciation on exporters’ margins.

Non-oil import growth during September 2007 showed a decline of 0.15 per cent estimated at $11,719.69 million against $11,737.27 million in September 2006. Cumulatively, non-oil imports during the first half of the current fiscal amounted to $77,805.21 million which was 34.13 per cent higher than the level of such imports valued at $58,006.59 million in April-September 2006.

The trade deficit during the first half of the current fiscal at $36,923.83 million was higher than the deficit of $26,024.39 million during April-September 2006.

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