The Hindu Business Line : Export growth slows to 12.9% in May

New Delhi, July 1 After clocking a hefty growth of 31.5 per cent at $ 14.40 billion in April, the country’s exports showed a distinct slowdown in momentum in the second month of the current fiscal, logging a growth of 12.9 per cent at $13.78 billion in May 2008.

In May 2007, the export was $12.21 billion.

Cumulatively, exports during the first two months of the current fiscal at $28.18 billion were 21.7 per cent higher than $23.16 billion it recorded during April-May 2007.

In rupee terms, exports during the first two months of the current fiscal at Rs 1,15,690 crore were 20.6 per cent higher than Rs 95,958 crore in the corresponding months of the previous fiscal, reflecting the gathering depreciation of the rupee vis-À-vis the greenback in the current fiscal.

When contacted about the dollar growth slowdown in exports in May, the Commerce Secretary, Mr Gopal K Pillai, told Business Line here that interest rates have hardened in recent months and there are some “disturbing signs and let us see how they evolve”.

However, he expressed the hope that with the first two months average growth running at 21.7 per cent in the current fiscal, there need not be any undue pessimism on the foreign trade front.

Even as export growth showed marked slowdown in the second month as compared to the initial month of the current fiscal, imports during May 2008 at $24.5 billion showed a high growth of 27.1 per cent over the level of imports at $19.31 billion in May 2007.

In April, 2008, import growth was 36.6 per cent at $ 24.27 billion against $17.76 billion in April 2007. In May, 2008, oil imports cost $8.4 billion against $5.6 billion in May 2007, reflecting the huge rise in global crude prices in recent months. Non-oil imports in May 2008 at $16 billion were 17.4 per cent higher than such imports at $13.7 billion in May 2007.

Cumulative value of imports during April-May 2008 at $48.82 billion showed a growth of 31.7 per cent against $37 billion in the corresponding months of 2007. Oil imports during the first two months of the current fiscal at $16.49 billion was 48.5 per cent higher than the oil imports of $11.10 billion during April-May 2007, while non-oil imports at $32.32 billion were 24.5 per cent higher than the level of such imports at $25.97 billion in the corresponding months of 2007. Cumulatively, the 21.7 per cent growth in exports and a higher 31.7 per cent growth in imports during the first two months of the current fiscal on the back of a spurt in imported crude prices and depreciation of the rupee vis-À-vis dollar saw the trade deficit zoom from a level of $13.9 billion in April-May 2007 to $20.64 billion in the period under review in the current fiscal.

The FIEO President, Mr. Ganesh Kumar Gupta, said that the slowdown in export growth during the first two months owed itself to the ban on some commodity exports. He said the effect of the depreciating rupee against the dollar would be felt only later as most of the exporters had “hedged in foreign currency markets” to safeguard their export income when rupee was appreciating continuously last year.

He further said that now as export momentum had slowed down the authorities should not toy with the idea of rolling back export relief measures extended to rupee-hit export segments last fiscal.

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Exports increase by 31% in April, imports up 36%

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