Exports fall 3.67% to $25.68 bn; import growth drops 17.09% to $33.81 bn

India is set to miss its export target for the fiscal with exports moving into the negative zone in February 2014. Exports posted a small decline of 3.67 per cent to $25.68 billion compared to the same month last year.

The lacklustre performance is attributed mostly to sluggish global demand and India losing benefits under the European Union’s 'Generalised System of Preferences’ scheme under which a number of sectors could send their goods to Europe at lower duties.

Trade deficit narrows

A sharp fall in non-oil imports pushed total imports down 17.09 per cent in February 2014 to $ 33.81 billion. As a result, trade deficit narrowed to $12.8 billion compared to $17.99 billion last year.

Oil imports, on the other hand, valued at $13.69 billion, was 3.1 per cent lower than oil imports valued at $14.13 billion in the corresponding period last year.

“We were expecting export growth to accelerate during the month but global demand continued to be sluggish. Exports to the EU also took a hit as India has graduated out of the GSP scheme. We hope the incentives announced recently will help push exports next month,” a Commerce Ministry official said.

April-Feb numbers

Cumulative value of exports for April-February 2013 -14 was $ 282.77 billion against $ 269.85 billion in the comparable period of the previous year posting a growth of 4.79 per cent.

The export target of $325 billion in all likelihood will be missed as exports in March have to cross $40 billion to touch the goal post.

Cumulative value of imports for April-February 2013-14 was $410.86 billion which was 8.65 per cent lower than imports of $449.78 billion in the same period last year.

The trade deficit for April-February 2013-14 was estimated at $128.08 billion which was lower than the deficit of $179.92 billion during April-February, 2012-13.

With exports contracting in February, Commerce Secretary Rajiv Kher admitted that it looked difficult for exports to cross $315 billion during the fiscal against a target of $325 billion.

Some optimism

But optimism still prevails. “You see some concessions were given to exporters of some sectors because of EU’s GSP scheme being withdrawn. Let’s see what happens,” he said.

Some exporters blame the export performance on the blocking of duty reimbursement payments by the Finance Ministry for the last four months.

“The export figures reflect the inability of Indian exporters, particularly the SMEs, to stay competitive in the wake of cash crunch due to pending claims of duty drawbacks worth over ₹10,000 crore,” Anupam Shah from the Engineering Export Promotion Council said.

Gold, silver imports dip

Gold & silver imports in February declined 71.42 per cent to $1.63 billion as the Finance Ministry continued with the restrictions placed on its exports and imports. Kher said that while talks were on for removal of restrictions, it might not happen immediately.

Exports in April-February 2013-14 at $282.77 billion were 4.79 per cent higher than $269.85 billion in the comparable period of 2012-13.

Imports during the period were $410.86 billion, 8.65 per cent lower than imports of $ 449.78 billion in the same period last year.

The trade gap in April-February 2013-14 was estimated at $128.08 billion which was narrower than the deficit of $179.92 billion during April-February 2012-13.

(This article was published on March 11, 2014)
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