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India's merchandise exports in February grew by a mere 4.3 per cent to $24.6 billion. This was due to poor overseas demand, especially in Europe, for electronics, engineering and textiles.
During the month, imports outpaced exports and rose 20.6 per cent to $39.8 billion, leaving a trade deficit (export-import gap) of $15.2 billion, provisional data released by the Commerce Ministry on Friday showed.
In February, exports grew at the slowest pace in three months, lower than $25.4 billion in January. Imports also declined from $40.1 billion in January.
Meanwhile, exports during April 2011-February 2012 registered a 21.4 per cent growth to reach $267.4 billion, crossing $250.46 billion in the last financial year. Imports during this period grew at a faster pace of 29.4 per cent to $434.2 billion, widening the trade deficit to $166.8 billion.
Rise in prices
The high import bill was mainly due to the rise in prices of oil and other commodities. The average price of oil last year was $70-75 billion a barrel to over $100 a barrel this year.
“Whether it is coal or fertilisers or vegetable oils, it's a double whammy. First, you have to import these due to the rise in domestic demand. Second, you pay much higher prices for it,” the Commerce Secretary, Dr Rahul Khullar, said.
He said exports for the fiscal would be around $292-298 billion, within a striking distance of the $300 billion target. However, imports for 2011-12 could go up to $470-475 billion, widening the trade deficit to a record $175-180 billion, he said.
The main drivers of exports during April 2011-February 2012 were engineering, petroleum products and gems and jewellery.
Electronics exports registered a meagre growth rate of 3.5 per cent to $8 billion during the fiscal till February because of poor demand in the European Union, which accounts for 60-70 per cent of India's total electronics exports.
Mr M. Rafeeque Ahmed, President, Federation of Indian Export Organisations, said the Government should extend interest subvention to all sectors till March 2013 and address the issue of TDS on commission to foreign agents in the Union Budget.
He said the second and third quarter of 2012 would be a difficult period for exports, and expected the Euro Zone situation to improve in the fourth quarter.
The Commerce Ministry had said earlier that due to the tight fiscal situation, the Government is not in a position to extend any sops to exporters.
The main components of imports during the 11 months of this fiscal were oil ($132.6 billion, and 41 per cent); gold and silver ($55 billion and 38.5 per cent); machinery ($32.2 billion and 27 per cent).
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