Thursday, September 16, 2010

Exports up 22% on global recovery

The growth rate in India's merchandise shipments accelerated from 13.8% in July to 22.5% in August on improved global demand for 'Made in India' goods. But imports jumped at a much higher pace of 32% in the month under review to leave a trade deficit in excess of $13 billion.

August exports were valued at $16.64 billion, while imports were pegged at $29.7 billion. The latest figures gave hope to policymakers on meeting the $200 billion exports target for the ongoing fiscal but also left them worried over the mounting trade deficit. "Things so far are going according to plan and we should be able to reach export target of $200 billion," commerce secretary Rahul Khullar said on Wednesday. He said while there was a marked improvement in exports during 2010-11 over the previous year, "you are well below the $17.8 billion exports achieved in August 2008". The rate of "heady growth" witnessed in the first quarter of the year has clearly decelerated, he said.

Federation of Indian Export Organisations president A Sakthivel said the growth rate in August reinforces the view that "we are on course to realise the export target or even surpass it to reach $210 billion". The umbrella body of exporters attributed the growth to commerce minister Anand Sharma's initiative to diversify export markets. For the April-August period, the trade deficit aggregated $56.62 billion with a monthly average of over $11 billion. The year may end with a trade gap of $135 billion. "The gap will be very large, even compared to $118 billion, that we had two years ago," he said.

During the April-August period, exports clocked a growth of 28.6% to $85.27 billion on a year-on-year basis. Imports during the period grew by over 33% to $141.89 billion.

Sectors that saw a healthy rise in exports include cotton yarn and fabric (41%), gems and jewellery (28%), iron ore (84%), chemicals (23%), engineering (40%) and petroleum, oil and lubricants (POL) (50%). But segments like readymade garments, handicrafts, handlooms and carpets are still in a bad shape, Khullar said.