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Exceeding all expectations, the country's merchandise exports registered an all-time high annual growth rate of 37.5 per cent to reach a record $246 billion in 2010-11 from $179 billion in 2009-10.
This huge increase was powered by sectors such as engineering, oil, gems and jewellery, textiles and pharmaceuticals. The market diversification strategy has also worked, with new markets such as Latin America showing great demand for Indian goods.
44% growth in March
Exports in March were worth $29.1 billion with a 44 per cent growth rate, while imports for the month were $34.7 billion registering a 17.3 per cent growth, leaving a trade deficit of $5.6 billion.
Meanwhile, despite increasing crude oil prices, total imports grew only 21.5 per cent to reach $350.3 billion. This resulted in a trade deficit of $104.4 billion. The total trade in 2010-11 was nearly $600 billion, almost half the size of the country's GDP of $1.2 trillion.
Releasing the trade data, the Commerce and Industry Minister, Mr Anand Sharma, told reporters “We have exceeded the export target of $200 billion for 2010-11 by $46 billion. This is very encouraging. We are confident of achieving the export target of $450 billion by 2013-2014.” He added “We will strive to increase our exports for 2011-12 by at least 25 per cent.”
SLOWER GROWTH IN 2011-12
Speaking on the occasion, the Commerce Secretary, Mr Rahul Khullar, said though the demand in the US and in a few European markets has improved slightly, the problems in the quake and tsunami-hit Japan and the weak demand in European Union could impact exports in this fiscal. “2011 is not looking good,” he said.
Besides, China, which is a major market for India's exports, is pulling back to curb inflation, he pointed out, adding that one should not expect the same growth in 2010-11 to be carried forward in 2011-12.
However, Mr Sharma said the bilateral free trade pacts that India has signed with ASEAN countries, Japan, Korea and the ones that will be inked soon including with the European Union will help boost India's exports. He said the Ministry will soon release the final strategy paper to double India's exports by 2013-14.
Meanwhile, Mr Ramu S. Deora, President, Federation of Indian Export Organisations, said the huge export growth was because exporters have diversified to Latin America, Asia and Africa. Mr Deora said exports in 2011-12 would cross $300 billion and touch $500 billion by 2014-15. However, he said a fall in export credit as a percentage of net banking credit, decline in credit to manufacturing sector and rising interest rates could impact exports.
Mr Khullar said the trade data is provisional, adding that the imports numbers would be revised upwards soon. He said this revision would result in the trade deficit going up to around $110 billion, adding, however, that the Current Account Deficit (CAD) will only be in the “neighbourhood of 2.5-2.7 per cent of the GDP.”
The most impressive performance for 2010-11 was by engineering exports, which touched $60.1 billion by registering an 84.8 per cent growth. Oil exports were worth $42.45 billion registering 50.58 per cent growth.
On the other hand, oil imports grew by 16.7 per cent to $101.7 billion, while machinery imports grew by 19 per cent to $27.2 billion.
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