The Hindu Business Line : Exports dip 12% at $12.82 b in October

New Delhi, Dec. 1 Although India’s export juggernaut slowed down distinctly in October 2008 by 12 per cent in dollar terms amid the slowdown of the global economy, overall export growth during the first seven months of the current fiscal – April to October – continues to cruise on a high growth of 23.7 per cent in dollar terms and 32 per cent in rupee terms.

Provisional foreign trade figures, compiled by the Directorate of Commercial Intelligence & Statistics (DGCI&S) and released by the Department of Commerce, show that exports during October 2008 at $12.82 billion were 12.1 per cent lower than the level of $14.58 billion in October 2007.

However, the cumulative value of exports during the first seven months of the current fiscal continues to show salubrious trends with exports amounting to $107.79 billion, against $87.14 billion in April-October 2007.

SEQUEL TO GLOBAL SLOWDOWN

When contacted, the Commerce Secretary, Mr Gopal K. Pillai, told Business Line here that the slowdown is a sequel to the world economic slowdown and labour-intensive export industries such as textiles, gem and jewellery and leather had all taken the hit in growth.

He said the Cabinet Secretary Mr K.M. Chandrasekhar is scheduled to hold a meeting in a couple of days to take a call on what relief measures could be extended to the labour-intensive export industries including easing of export credit so that jobs of people engaged in the manufacturing-cum-export activity is not lost or imperilled.

He is confident that some sort of relief measures to exporters reeling under the double whammy of decline in export order and high transaction cost would be announced by the Prime Minister, Dr Manmohan Singh, himself early next week.

Meanwhile, Moody’s economy.com’s Sydney office economist, Ms Sherman Chan, said in an instant assessment of Indian trade data that “any government assistance to struggling exporters is only a band-aide solution, as the root problem is the recession in most of the parts of the advanced world that has made consumption sluggish”.

The Federation of Indian Export Organisation (FIEO) President, Mr G.K. Gupta, apprehends that November export figure would be negative by 20 per cent if the authorities do not put in place some incentive measures such as restoring the income-tax exemption benefit to all exporters and interest subvention and export finance at less than five per cent as is the norm the world over to stay competitive.

A particularly noteworthy feature on the export front is the persistent depreciation of the Indian rupee vis-À-vis the US dollar, in which a dominant share of Indian export receipts are denominated has also helped in a higher export growth of 8.2 per cent in rupee terms at Rs 62,387 crore in October 2008, against Rs 57,641 crore in October 2007.

Cumulatively too, India’s exports fetched Rs 4,67,505 crore during the period under review, against Rs 3,54,064 crore in the corresponding period of 2007, reflecting the beneficial fallout of the depreciating currency on export earnings.

IMPORTS HIGHER

Imports during October 2007 at $23.36 billion were 10.6 per higher over the level of imports valued at $21.12 billion in October, while cumulatively imports during April-October 2008 at $180.78 billion were 36.2 per cent higher than $132.78 billion in the corresponding period of 2007.

In rupee terms, India’s imports at Rs 1, 13,659 crore during April 2008 were 36.2 per cent higher than similar imports valued at Rs 83,472 crore in October 2007, while cumulatively imports during the first seven months of the current fiscal at Rs 7,86,059 crore were 45.6 per cent higher than the value of such imports at Rs 5,39,879 crore in April-October 2007.

The high growth in import both in the latest month and also cumulatively is the result of a depreciating currency which is computed to have depreciated by 20 per cent since the beginning of this year, making imports expensive.

Oil imports during October 2008 at $7.96 billion was 22 per cent higher than $6.52 billion in October 2007, reflecting the reversal of the spike in global crude prices, while cumulatively oil imports at $65.77 billion during April-October 2008 were 60 per cent higher than such imports at $41.11 billion in the corresponding period last year, reflecting the wild gyrations of global crude prices in most part of the current fiscal.

Non-oil imports in October 2008 at $15.4 billion were 5.5 per cent high than non-oil imports of $14.60 billion in October 2007. The deceleration in non-oil import growth to a moderate 5.5 per cent in October 2007 might get reflected in the index of industrial production rate with industry minimising its capital goods requirement in the wake of incipient recession, officials said. However, such import growth during the first seven months of the current fiscal at $ 115 billion was 25.5 per cent higher than the level of $91.66 billion during the corresponding period of 2007, reflecting the high cost of import in the wake of a depreciating currency.

The country’s trade deficit during the period April-October 2008 zoomed to $72.99 billion from the level of $45.63 billion during the corresponding months of 2007.

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