Export growth back on double-digit track

The New Year has brought good news on the foreign trade front too. The export growth, after slumping in October, is back on the double-digit growth path. The revival in the economy has also driven imports to a new high, pushing up the trade deficit steeply.

Merchandise exports rose 13.74 per cent to $4.49 billion in November 2003 from $3.95 billion in November 2002. Exports grew just 5 per cent in October.

Nevertheless, exports would continue to grow at 8-10 per cent for the remaining months of the year, said ICRA Economic Adviser Saumitra Chaudhuri.

In rupee terms, exports grew 7.3 per cent in November at Rs 20,458.9 crore, while imports went up 19.29 per cent at Rs 29,192.41 crore.

In April-November 2003, exports climbed 3.39 per cent at Rs 168,758.55 crore, while imports rose 15.9 per cent at Rs 220,582.29 crore.

ICRIER Director Arvind Virmani said export growth for the full year would be around 9 per cent. A Sars outbreak in China could, however, push India's exports beyond 9 per cent, he added.

The only pessimist on this front is B B Bhattacharya of the Institute of Economic Growth, who expects only a 6-7 per cent export growth this fiscal.

Imports were up 26.45 per cent at $6.4 billion in November 2003 from $5.07 billion in November 2002, which pushed up the trade deficit over 70 per cent to $1.9 billion from $1.1 billion.

The 8.81 per cent export growth during April-November 2003 was, however, way below the 12 per cent target set for the fiscal. Data released by the commerce ministry show that the value of exports during this period was $36.5 billion, against $33.55 billion in April-November 2002.

Imports grew almost 22 per cent during this period to $47.72 billion from $39.12 billion in the corresponding period last fiscal. Non-oil imports rose by a steep 26 per cent, reflecting improved demand on account of industrial activity.

The value of non-oil imports was $ 34.92 billion in the first eight months of 2003-04 as against $ 27.74 in the corresponding period of 2002-03.

Oil imports went up by 12.41 per cent, from $ 11.38 billion in 2002-03 to $ 12.8 billion in the first eight months of the current fiscal.

Trade deficit in the first eight months of the fiscal, was $ 11.22 billion, double the $ 5.58 billion deficit in April to November 2002-03.