The Hindu Business Line : Old orders buoy export growth by 36% in Oct

New Delhi, Dec. 3 Despite rupee appreciation hurting the competitiveness of exporters, exports notched up the fastest growth in the last one year and a quarter by 36 per cent in October with companies completing old orders and resorting to hedging to take cover from currency-induced setback to earnings.

Provisional figures released by the Department of Commerce reveal that exports during October 2007 at $13,302.71 million were 35.65 per cent higher than the level of $9,806.69 million in October 2006. Cumulative value of exports for April to October 2007 was $85,583.30 million against $70,792.52 million, registering a growth of 20.89 per cent in dollar terms.

In rupee terms, the growth was a modest 7.06 per cent during the first seven months of the current fiscal.

Officials in the Department of Commerce said that less import intensive but more employment intensive traditional industries such as textiles, handicrafts, leather and marine products remain laggards in exports, while the high growth was recorded by petroleum products, gems and jewellery and engineering goods.

Gem & jewellery

Figures with the Gem and Jewellery Export Promotion Council show that gem and jewellery exports rose by a hefty 48 per cent in October 2007 to $2.16 billion against $1.4 billion in October 2006.

The officials worry over the persistently poor record of textile exports which against a full year target of $25.06 billion had posted a measly show of $4.01 billion in the first quarter (April-June) 2007, the latest available figure, as compared to $4.06 billion in the corresponding quarter of last fiscal.

The Commerce Secretary, Mr Gopal K Pillai, said on the sidelines of India Economic Summit that the target of $160 billion for the current fiscal would not be achieved and at best exports would hover $140-145 billion.

The FIEO Vice-President, Mr A.Saktivel, has said that the government could compensate the cost of hedging by exporters as they have been compelled to hedging because of the fast appreciating rupee.

Imports rise 24%

Imports in October 2007 at $20,785.29 million showed an increase of 24.27 per cent over the level of imports at $16,725.65 million in October 2006. Cumulatively too, imports amounted to $1,29,989.72 million during April-October 2007, against $1,03,735.88 million, registering a growth of 25.31 per cent. In rupee terms, import growth during the period under review was 11.07 per cent.

Oil imports during October 2007 at $6,126.22 million was 14.59 per cent higher than oil imports of $5,346.14 million in the corresponding month last year and cumulatively oil imports during the first seven months of the current fiscal were valued at $37,525.44 million, against $34,349.77 million in the corresponding period last year, showing a growth of 9.25 per cent.

Non-oil imports

Non-oil imports during October 2007 were estimated at $14,659.07 million, which were 28.82 per cent higher than growth of non-oil imports of $11,379.52 million in October 2006. Cumulatively non-oil imports during April-October 2007 were valued at $92,464.28 million which was 33.26 per cent higher than the level of such imports valued at $69,386.11 million in April-October 2006.

The high growth of exports and higher rate of imports during the first seven months of the current fiscal has led to a widening of trade deficit from $32,943.35 million to $44,406.42 million.

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