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Exports in July have registered a whopping 81.8 per cent year-on-year growth to $29.3 billion, according to provisional data with the Commerce Ministry.
The drivers of this growth in July — the fastest since April 1995 — were sectors such as engineering ($8.7 billion), petroleum products ($4.6 billion), readymade garments ($1.38 billion), gems and jewellery ($3.5 billion) and electronics ($0.9 billion).
Engineering exports were at $31.6 billion during April-July 2011 due to a major increase in shipments to Africa and Latin America. Other sectors have also seen a diversification into such non-traditional destinations.
Releasing the data on Thursday, the Commerce Secretary, Mr Rahul Khullar, said the current buoyancy in exports was due to execution of export orders received well before the recent crisis in the US and Europe, the tsunami in Japan and the high inflation in China.
He, however, said growth rates would slow from August due to demand contraction in traditional markets such as the US and Europe. Besides, higher interest costs are hurting small and medium exporters, he said, adding that, “I am trying to get something done on that front.” Mr Khullar said monthly exports are likely to fall to less than $25 billion soon, which would make it tough to achieve a figure of $300 billion for the entire fiscal.
In 2010-11, India's merchandise exports were valued at a record $246 billion.
Asked about the fate of the popular export incentive Duty Entitlement Passbook Scheme, scheduled to expire on September 30, Mr Khullar said, “As a Department of Commerce official, I have always argued that it should continue, but I recognise that there is a fiscal problem.”
Imports also up
Meanwhile, imports in July rose 51.5 per cent to $40.4 billion. A comparison of the import numbers for July vis-à-vis June shows that imports of machinery, electronics, gold and silver have declined, while imports of oil, pearls and precious stones have risen.
The trade deficit in July widened to $11.1 billion, up from $7.7 billion in June. Mr Khullar said the current trade deficit levels are a worry and may cross $130 billion this fiscal. The trade deficit during April-July 2011 is already $42.7 billion.
Exports during April-July 2011 jumped 54 per cent to $108.3 billion, while imports during this period increased 40 per cent to $151 billion.
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