The Hindu Business Line : Karnataka’s garments, jewellery exports up

Bangalore, Nov. 10 Iron ore and engineering exports from Karnataka took a hit in 2008-09, while readymade garments and gems and jewellery did well, despite the global recession.

The performance of these sectors is similar to the national trend, while there is a departure in the case of engineering goods.

The export figures for the State, recently put together on the basis of ‘State of origin’ entries on export documents, show that iron ore shipments from Karnataka fell by nearly Rs 3,000 crore or 29 per cent in 2008-09 to Rs 7,275 crore against Rs 10,197 crore the previous year. They made up 5.6 per cent of the State’s exports in 2008-09. Despite this drop, exports of iron ore from the State increased by more than 10 times since 2001-02, when it was Rs 692 crore.

According to the October report on ‘Foreign Trade & Balance of Payments’, brought out by the Centre for Monitoring Indian Economy, all-India exports of ores and minerals fell 14 per cent in dollar terms in 2008-09, which is comparable to the decline in the State’s export in rupee terms.

Only gems and jewellery, which accounts for about 8 per cent of the State’s exports, has grown at a faster rate since 2001-02. In 2008-09, exports from the State on this count were up 12 per cent to Rs 10,893 crore. At the all-India level, gems and jewellery exports were up 41 per cent in dollar terms to nearly $27.7 billion in 2008-09.

Overall exports

Electronics and computer software exports fell by 1.3 per cent in rupee terms, from Rs 79,518 crore to Rs 78,153 crore. Since ‘software’ accounts for 60 per cent of export earnings from the State, overall exports from Karnataka were down 1.8 per cent in rupee terms. However, at the all-India level, exports increased 28 per cent in rupee terms (12.2 per cent in dollar terms) in 2008-09.

Readymade garments’ exports from the State increased by 31 per cent, from Rs 4,125 crore in 2007-08 to Rs 5,395 crore in 2008-09. Garment exports from the State touched an all-time high of Rs 6,773 crore in 2006-07. It was hit by rupee appreciation in 2007-08. According to the CMIE report, the all-India readymade garment exports increased by 13 per cent in dollar terms, mirroring the trend in the State.

Mr K.R. Jayaram, Vice-President, Garment and Textile Workers’ Union, told Business Line: “This only goes to show that the industry was exaggerating the impact of the global recession on India, in the process forcing workers and middle-level managers to take job cuts. The problem was more severe in 2008, when the rupee appreciated.”

The departure from the national trend (Karnataka accounts for 15-16 per cent of the country’s exports) is explained by the performance of engineering exports. Engineering goods, which account for 26 per cent of India’s exports, were up 26 per cent in dollar terms in 2008-09, pushing up total exports. However, in Karnataka, engineering exports, which make up 5.5 per cent of the State’s exports, dipped 25.5 per cent in rupee terms (or about 10 per cent in dollar terms).

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