The Hindu Business Line : Exports up 27 pc in July at $7.2 b — Apr-July trade deficit widens to $13.97 b

THE country's exports during July 2005 notched up a 27 per cent growth at $7,234.41 million compared with $5,705.22 million in the corresponding month of 2004.

Announcing the latest trade figures at a news conference here, the Union Minister for Commerce and Industry, Mr Kamal Nath, said that cumulatively the country's exports during the first four months of the current fiscal registered a growth of 21.33 per cent at $28,134.72 million ($23,188.47 million).

He said that by sustaining this uptrend, achieved over and above the consistently high export growth rate during the last two years, all efforts would be made to accelerate exports to reach and even surpass the target of $92 billion set for the fiscal 2005-06.

He said that the growth must be seen against high oil prices, the depreciating US dollar and revaluation of the yuan.

He said that the incremental export growth should be viewed against the fact that last year, high export growth generated 12 lakh jobs in the country.

Stating that last year the country's exports reached $80 billion and imports were $105 billion, the Minister said that India's economic engagement with the world during this period was $185 billion.

This year, he said, "it should be $250 billion and within three years, we plan to take this trade figure (exports and imports) to $500 billion".

Estimates provided by the DGCI&S for the month of July 2005 show that the commodities/sectors that have performed well include iron ore (81 per cent), petroleum products (41 per cent); marine products (41 per cent), plastics and linoleum (40 per cent); rice (37 per cent) readymade garments of all textiles (35 per cent); basic chemicals (30 per cent); engineering goods (25 per cent); and gems and jewellery (17 per cent).

The country's import during July 2005 rose 33.21 per cent at $9,904.22 million ($7,435.16 million).

Cumulatively, imports during April to July 2005-06 are valued at $42,109.47 million ($30,880.86 million), showing a growth of 36.36 per cent.

Oil imports during April-July 2005-06 are estimated at $12,543.23 million ($9,478.45 million), a 32.33 per cent growth.

Non-oil imports during April-July 2005-06 are estimated 38.14 per cent higher at $29,566.24 million ($21,402.41 million).

He said the bulk of import growth here is in capital goods, raw materials and intermediate goods, and not so much in consumer goods.

The trade deficit for the first four months of the current fiscal has widened to $13,974.75 million ($7,692.39 million).

The Minister said that widening trade deficit was not a problem, "as we have a healthy forex reserves".

About the proactive policy measures that the Government put in place to encourage exports, the Minister said that it was the constant endeavour of the Government to reduce transaction cost through simplification of procedures.

He said that the Government has announced an initiative to set up six free trade and warehousing zones through MMTC Ltd.

The locations tentatively identified for such facilities include Kandla, Noida, Mumbai, Haldia, Kochi and Ennore, and would be set up in phases. The estimated investment for each warehouse would be Rs 100 crore.

Asked about the discrepancies in the textile export figures released by the DGCI&S and those emanating from outside the country, the Minister said that a committee has been set up within the Ministry to study the issue.

He said that the foreign direct investment, too, is picking up as was evident from the first two months' data — FDI inflows amounted to $1.2 billion during April-May 2005 ($800 million).

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