Positive global outlook augurs well, say exporters; imports continue to decline
The new fiscal year has brought some cheer for exporters, with outbound shipments rising 5.26 per cent in April to $25.63 billion. This follows a decline in exports in the previous two months.
Growth in exports of engineering goods, garments/textiles, leather and pharmaceuticals more than compensated for the fall in gems and jewellery exports.
Imports, however, continued to decline, falling 15 per cent to $35.72 billion in April, thanks to restrictions on gold imports and weakness in manufacturing activities, which dampened the demand for capital goods.
The trade deficit in April narrowed to $10.08 billion from $17.67 billion in the year-ago period.
“The targeted incentives announced in February for sectors such as textiles and leather, for exports to the EU, are showing results. There is also an overall rise in global demand,” a Commerce Ministry official told Business Line.
“The US grew at a faster-than-anticipated pace in the second half of 2013, and Canada is also expected to follow suit in 2014. The Euro Zone has emerged from recession and growth is expected to resume in 2014,” said Federation of Indian Export Organisations President Rafeeque Ahmed.
Commenting on the data, Aditi Nayar, Senior Economist, ICRA, said: “Merchandise exports are expected to grow in the ongoing quarter, benefiting from healthy global demand and a stable rupee.”
Gold imports plunged 74.13 per cent in April to $1.75 billion. Import of project goods, transport equipment, electronic goods and iron and steel also fell, reflecting the manufacturing sector’s woes.
2013-14 target missed
India missed its export target of $325 billion for 2013-14, posting only a 3.98 per cent increase in shipments to $312.35 billion. Imports fell 8.11 per cent to $450.94 billion, narrowing the trade deficit to $138.5 billion from $190.3 billion in the previous fiscal year.