Economy

Exports surge 50% in February to 11-month high

Our Bureau New Delhi | Updated on November 21, 2011 Published on March 10, 2011

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Goods export in February shot up by 49.8 per cent over the same month last year — posting an 11-month high — to $23.6 billion, enabling the country to surpass the 2010-11 export target of $200 billion well in advance.

Exports during April 2010-February 2011 grew a robust 31.4 per cent to reach $208.2 billion, due to diversification to new markets in Asia, Africa and Latin America as well as an increase in demand in the US, a traditional market. The demand in many European markets (another traditional destination) is still anaemic.

Addressing newspersons on Thursday to announce the trade data, the Commerce Secretary, Dr Rahul Khullar, said exports this fiscal would touch a record $235 billion. The export boom, he said, could bring down the current account deficit (CAD) to 2.5-2.8 per cent of GDP in 2010-11, from the earlier estimated 3.5 per cent. He expects imports in 2010-11 to touch $350 billion. As a result, the trade deficit would narrow to around $115 billion from the earlier projection of $135 billion. However, he said, the disturbances in West Asia could hit remittances, which could in turn affect CAD.

The data showed a higher demand abroad for Indian goods from sectors such as engineering, electronics, plastics, chemicals, pharmaceuticals, gems and jewellery. India will have to capitalise on engineering and chemical sectors to increase manufacturing and exports, Dr Khullar said, adding that the Commerce Ministry's draft strategy paper — aiming to take exports to $450 billion by 2013-14 and reduce the trade deficit — proposes measures to boost exports from these two sectors.

Engineering exports stood out with an 88 per cent growth during April-February to touch $52.7 billion, accounting for 25.3 per cent of the total exports. Dr Khullar said engineering exports would touch $56 billion by fiscal-end.

Imports rise 21.2%

Imports in February grew by 21.2 per cent to $31.7 billion, resulting in trade deficit of $8.1 billion for the month. Imports during April-February recorded an 18 per cent growth to $305.3 billion taking the trade deficit to $97.1 billion. Oil imports during April-February grew 12.5 per cent to $88.2 billion, while machinery imports grew 19 per cent to $24.3 billion. “If imports are growing rapidly, why no import substitute is available and why we are dependent on these imports,” Dr Khullar asked, adding that there was a need to address such issues through domestic policies and by increasing domestic production.

Mr Ramu S. Deora, President, Federation of Indian Export Organisations, said the growth in exports is primarily from Asia, where India has signed Free Trade Agreements with countries, as well as from Latin America and Africa because of specific product and market-linked incentives to exporters.

Dr Khullar said the import numbers are only ‘reconstructed' rough estimates owing to a system failure, adding that the Ministry will soon release revised import numbers. He said there will be variation in export numbers too, with details of more exports from Special Economic Zones expected. [email protected]

Published on March 10, 2011
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