Economy

Export growth in Nov up 4.2%; imports record 29.1% growth

Arun S New Delhi | Updated on March 12, 2018 Published on December 09, 2011

Exports table

 



India's exports in November grew marginally by 4.2 per cent with shipments in the month worth $22.3 billion. Exports in November 2010 were $21.4 billion.

Imports in the month were $35.9 billion, recording a 29.1 per cent growth from $27.8 billion in November 2010. This resulted in a trade deficit of $13.6 billion, according to provisional data released by the Commerce Ministry on Friday.

The Commerce Secretary, Dr Rahul Khullar, said exports during April-November grew by 33.2 per cent year-on-year to $192.7 billion. April-November imports registered a 30.2 per cent growth to $309.5 billion, leaving a trade deficit of $116.8 billion.

The Commerce Secretary, however, refused to give the growth numbers for November saying, “What is sacrosanct is not the monthly number but the overall picture”.

Significantly, he said the country is facing a serious balance of trade problem due to the high level of imports, adding that the trade deficit for 2011-12 could be in the range of $155-160 billion. This means the current account deficit may cross 3 per cent of GDP, while the Government's comfort level for the same is 3-3.5 per cent of GDP.

Dr Khullar also said it will be a bit difficult for exports to meet the $300 billion target for this fiscal.

He said though exports, after increasing till July, has steadily decelerated. He added that the deceleration of imports is slower than that of exports.

The exchange rate movement (rupee depreciation) will impact exports and imports in the next four months, Dr Khullar said. “It will make exports more competitive but it will also make imports more expensive. January numbers will definitely show impact of exchange rate,” he said.

“In the coming months, there will be a further decline in import growth because of exchange rate depreciation. As the exchange rate depreciated, imports have become far more expensive. So it is not going to be as simple to continue importing,” the Secretary said.

He said companies have begun to pass through the extra costs of imports in sectors such as auto and white goods, which have imported inputs in them. “As those goods become more expensive, prices will go up,” he said, adding that demand for these goods will contract, in turn shrinking the demand for imports too.

Machinery (including second hand and other capital goods) and electronic goods imported from China (including cell phones) have seen huge growth, he said. Growth in gold and silver imports is partly driven by gems and jewellery exports (for which these are inputs) and also due to people buying them as they are considered safe assets.

While petroleum products imports have risen due to price increase, vegetable oil imports grew due to increase in demand and prices. Fertiliser imports, which were posting negative growth, are up as contracts have come through, he said.

 

FIEO plea

The Federation of Indian Export Organisations (FIEO) said that in order to boost exports and reduce the trade deficit, the Government should provide export finance at concessional rate of not more than 7 per cent for small and medium enterprises and at 9 per cent for large business houses.

Mr Ramu S. Deora, President, FIEO, said, with the abnormal increase in the cost of inputs and packaging material, exports are becoming uncompetitive nullifying the scope of margins offered by rupee depreciation. He said despite all odds and the dismal global situation, the country's exports would be able to reach $275 billion by this fiscal-end.

arun.s@thehindu.co.in

Published on December 09, 2011
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