The Hindu Business Line : Sept export growth slows to 10.4%; imports rise 43.3%

The country’s foreign trade front appears to present a gloomy picture at the mid-point of the fiscal year with export growth having slowed down to 10.4 per cent in September 2008, while import growth is still keeping up the traction registering a high growth of 43.3 per cent in dollar terms.

According to provisional figures released by the Department of Commerce here today, exports during September 2008 at $13.74 billion were 10.4 per cent higher than the level of $12.45 billion during the corresponding month of 2007. However, cumulatively, exports during the first half of the current fiscal (April to September) at $94.97 billion saw a growth of 30.9 per cent over the level of $72.55 billion in the corresponding months of the previous fiscal.

In rupee terms, the export growth was 36.7 per cent at Rs 4,05,118 crore during April-September 2008 against Rs 2, 96,423 crore, thanks to the steadily depreciating rupee throughout this fiscal.

Imports during September 2008 at $24.38 billion show a growth of 43.3 per cent over the level of $17 billion, while cumulatively imports during the first half of the current fiscal at $154/7 billion saw a growth of 38.6 per cent over the level of $111.7 billion in the corresponding months of 2007.

As a result of slower export growth in September and higher import growth, the country’s overall trade deficit during the first half has zoomed to $59.77 billion which was higher than the deficit of $39 billion during April-September 2007. Though the monthly trade deficit narrowed from August to September, it was larger than anticipated and was more than twice the deficit logged a year ago.

Hefty import growth and a slowdown in export growth, official sources said, is a big worry to the authorities as it exerts pressure on the current accounts. But import growth is difficult to contain as the Indian economy is heavily dependent on imported crude oil whose price has only begun to moderate in recent weeks. The sharp depreciation of the rupee in recent months also led to inflating the import bill.

Officials are worried too about sustaining export growth in the coming months, given the fact that the global meltdown of financial markets and incipient recessions have begun to hurt demand around the world.

Oil imports cumulatively during April-September 2008 amounted to $55 billion which was 59 per cent higher than such imports valued at $34.6 billion in the corresponding months of 2007, while non-oil imports rose from a level of $77 billion during Apr-Sept 2007 to $99.7 billion during April-September 2008.