Rise 37.5% to touch $246 billion; imports grow 21.5%
India’s merchandise exports reached $246 billion, registering a growth of 37.5 per cent while imports topped $350.3 billion, up 21.5 per cent year-on-year during financial year 2010-11. While the recovery had been happening at a sluggish rate in developed economies, bulk of the growth came from newer markets.
The government had set a target of achieving exports worth $200 billion in the last financial year. It had also set an ambitious goal of realising $450 billion in export of goods by 2014. In 2009-2010, exports ended up falling 3.6 per cent to $178.6 billion and imports declined by 5.5 per cent year-on-year at $286.8 billion.
“We have exceeded this year’s target by $46 billion even though there had been contraction in demand in the last financial year. We will strive towards achieving higher targets in the future,” Commerce and Industry Minister Anand Sharma said while releasing the provisional trade figures. He also said the trade deficit for financial year 2010-2011 was expected to end within the range of $105-110 billion. According to initial numbers, the trade deficit stood at $104.4 billion.
“The numbers indicate the current account deficit (CAD) is around a comfortable 2-2.5 per cent of the gross domestic product (GDP),” said Commerce Secretary Rahul Khullar. He said exports in March grew by a whopping 43.9 per cent to $29.1 billion, the highest growth so far and imports grew by 17.3 per cent reaching $34.7 billion. The official data with revised figures is expected to be released on May 1.
He also reiterated the numbers released today by the ministry of commerce and industry are to be revised as there had been a mechanical failure in Indian Customs and Central Excise Electronic Commerce/Electronic Data Interchange Gateway.
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The minister also said the growth had mainly come from newer markets such as Latin America and Africa and not from traditional destinations of the US, Europe and Japan. Sharma said going forward with the bilateral trade agreements that India had signed with South Korea, Malaysia, Singapore, Indonesia, Thailand and Association of South-East Asian Nations (ASEAN) would contribute in achieving the target of $450 billion in exports by 2014.
“In the last financial year (2009-2010), growth had mainly come from Latin America, Africa and Asia. Asia is contributing around 52 per cent of the total exports and going forward with the implementation of the bilateral trade agreements, this may go up to 55 per cent. However, the only concern will be of infrastructure bottlenecks that may not be able to sustain the kind of growth targets we are planning,” said Federation of Indian Export Organisations Director General Ajay Sahai.
Exporters also feel that increasing cost of credit might spell doom for exports going forward, especially the small and medium sector, which accounts for 40 per cent of the country’s exports.
“The good performance of exports is expected to continue as developed economies continue to recover, while rising crude oil prices poses an upward risk to imports bill,” said a note by Crisil Ratings.
In FY11, growth in exports came mainly from engineering products rising by a staggering 84.8 per cent to $60.1 billion, petroleum soaring by 50.6 per cent at $42.5 billion, electronic goods by 34.5 per cent at $7.4 billion, textiles at $21 billion, drugs and pharmaceuticals at $10.3 billion and carpets at $1.1 billion. This is for the first time that exports of carpets from India have exceeded the $1 billion-mark.