First half trade deficit widens to $73.46 b

India’s merchandise trade has continued to slow down for the second consecutive month. Exports in September grew only at 36.36 per cent to $24.82 billion, according to the data released by the Commerce Ministry on Tuesday.

As against this, shipments in July had surged by almost 82 per cent, while the growth had slowed down to 44.25 per cent in August.

The slowdown in export growth was mainly on account of a fall in demand in traditional markets such as the US and the European Union.

On the other hand, imports in September increased just 17.2 per cent to $34.59 billion. Compared to this, imports in July had grown 51.52 per cent but had decelerated to a 41.82 per cent growth in August.

The Commerce Secretary, Dr Rahul Khullar, had said last month that the “prognosis for the next six months is a slowdown in export growth’’.

Cumulative exports during April-September 2011 have grown 52.08 per cent to touch $160 billion.

The Commerce Ministry had said last month that exports are on track to touch the $300-billion target for 2011-12. Exports in 2010-11 were worth $245.9 billion.

Trade deficit increases

Meanwhile, imports registered a 32.41 per cent growth to reach $233.5 billion during the first half of this fiscal. This has led to a trade deficit of $73.46 billion for April-September 2011, a level that is higher than the deficit of $71.12 billion during the same period last year.

Oil imports during September, 2011 rose 14.62 per cent to $9.2 billion, while oil imports during April-September, 2011 increased 42.39 per cent to $70.35 billion.

Non-oil imports, including capital goods, during September 2011 jumped 18.17 per cent to $25.38 billion, while non-oil imports for the first half of this fiscal grew 28.52 per cent to reach $163.16 billion.

Export sectors that performed well during the first half of this fiscal were: engineering (103 per cent growth to $46.4 billion), electronics (66.7 per cent to $5.7 billion), chemicals (64 per cent to $6.2 billion), petroleum products (53 per cent to $27 billion), drugs and pharmaceuticals (33 per cent to $6.5 billion), readymade garments (32 per cent to $6.8 billion) and gems and jewellery (23 per cent to $18.5 billion).

The main contributors to the growth in imports during April-September 2011 (other than oil imports) were: gold and silver (80 per cent to $31.1 billion), machinery (34 per cent to $17.4 billion), electronics (33 per cent to $16.9 billion), coal (43 per cent to $8.4 billion), vegetable oil (60 per cent to $4.9 billion) and pearls, gems and jewellery (9 per cent to $15.7 billion).

Mr Ramu S. Deora, President, Federation of India Export Organisations, said: “A slowdown expected in the third and fourth quarters may take our total exports to $280 billion by the end of current fiscal.’’

Mr Deora, however, appealed to the Government to extend the two per cent interest subvention to all export sectors to arrest the declining trend of export growth. Terming the trade deficit as “alarming’’, Mr Deora said it may touch $150 billion by the end of 2011-12.

(This article was published on November 1, 2011)
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