Exports rise 1.7% to $24.2 bn in April

Gold-driven imports surge 11%, leaving trade deficit higher by 27%

In April, India’s merchandise exports rose a marginal 1.68 per cent to $24.16 billion, against $23.76 billion in the corresponding month last year. However, imports surged a massive 10.86 per cent to $41.95 billion, against $37.80 billion in the year-ago period, primarily owing to a 138 per cent jump in gold and silver imports.

Trade deficit stood at $17.8 billion, compared with $14.04 billion in April 2012, according to data released by the Ministry of Commerce and Industry here today.

If the trend persists, all hopes of containing the current account deficit, which reached a record 6.7 per cent of GDP in the third quarter of 2012-13, could be lost, analysts said.

High-value petroleum product and engineering shipments contracted, the latter because of power outages, arresting the rise in exports to modest level.

“... in exports, the problem is with engineering and petroleum, which showed negative growth. Imports have seen undue growth of 10.9 per cent, largely contributed by significant increase in gold imports, ” Commerce Secretary R S Rao said, while releasing the data.

In April, gold imports stood at $7.5 billion, against $3.1 billion in the year-ago period. Rao said the government was watching the situation closely. He added the huge surge in gold imports could be attributed to Akshaya Tritiya, considered an auspicious occasion to buy gold.

Director-General of Foreign Trade (DGFT) Anup K Pujari said the government had been “taken by surprise” at such an increase in gold imports. “As DGFT, I am not going to be defensive on the fact that imports are growing; I am happy imports are growing. Please remember, a lot of these imports go into exports,” he told reporters.

Rafeeque Ahmed, president, Federation of Indian Export Organisations, said the softening gold prices would gradually reduce imports of the commodity, in terms of value. In terms of the volume of gold imports, the government should keep a close check, he added.

Trade deficit during the month was the third-highest, after $20 billion in October 2012 last year and $21 billion in January this year. Rao said the government would look into the widening trade deficit and would “come out with considered steps to contain this growing trade deficit”.

Oil imports rose 3.92 per cent at $14.08 billion in April. However, non-oil imports rose substantially by 14.90 per cent at $27.86 billion. Nearly one-fourth of this came from gold. The rest may indicate revival of industry which needs imports of raw materials or semi-finished products. In fact, March IIP growth did show modest recovery at 2.5 pre cent against 0.5 per cent in February.

Imports of metal scraps and ores rose 52 per cent, basic chemicals 23 per cent, non-ferrous metals 13.7 per cent.

During April, exports of engineering products and petroleum items fell 8.6 per cent and 0.5 per cent, respectively. Rice exports soared 84 per cent.

On the fall in exports of engineering goods, he said production was getting hit by the poor power situation in a few states.

FY14 exports target set at $325 billion
The commerce department has set a modest target of $325 billion of outbound shipment for the current financial year. This is 8.15 per cent higher than $300.5 billion achieved in 2012-13. Earlier the department had pegged exports to touch $500 billion in 2013-14. The new target is not only way down the initial numbers, but also less than $360 billion set for 2012-13 originally. The target has been slashed as India's major markets of Europe and US are taking longer to recover. However, Commerce Secretary S R Rao said Europe remained a concern, while demand from US was on the rise.

	Eports 2011-12 ($ billion)	Exports 2012-13 ($ billion)	%Change	Imports 2011-12 ($ billion)	Imports 2012-13 ($ billion)	%Change
April	23.69	23.76	3.23	36.54	37.8	3.83
May	26.79	25.68	-4.16	45.28	41.95	-7.36
June	26.51	25.07	-5.45	40.87	35.37	-13.46
July	26.34	22.44	-14.8	41.06	37.34	-7.61
August	24.7	22.3	-9.7	40	38	-5.08
September	26.56	23.69	-10.78	39.76	41.78	5.09
October	23.63	23.25	-1.63	41.18	44.21	7.37
November	23.27	22.29	-4.17	39.1	41.59	6.35
December	25.36	24.88	-1.92	40.04	42.54	6.26
January	25.38	25.59	0.82	42.95	445.58	6.12
February	25.19	26.25	4.23	40.11	41.18	2.65
March	28.83	30.84	6.97	42.38	41.16	-2.87

Trade Deficit

	Trade Deficit 2011-13 ($ billion)	Trade Deficit 2012-13 ($ billion)	Trade Deficit 2013-14 ($ billion)
April	12.85	14.04	17.78
May	18.49	16.27
June	14.36	10.3
July	14.72	14.9
August	15.3	15.7
September	13.2	18.09
October	17.55	20.96
November	15.83	19.3
December	14.68	17.66
January	16.97	19.99
February	14.92	14.93
March	13.77	10.32