For the first time in 13 months, the country’s oil import bill registered a positive growth rate of 7.3 per cent, though the overall import continued to fall at $22.88 billion (Rs 1,06,640 crore) in November compared to $23.48 billion (Rs 1,09,440 crore) in the same month last year.
Overall imports during April-November stood at $170.43 billion (Rs 7,94,370 crore) as against $234.35 billion (Rs 10,92,305 crore) in the corresponding period last financial year even as exports registered positive growth of 18.2 per cent reaching $13.19 billion (Rs 61,478 crore) from $11.16 billion (Rs 52,016 crore) in November 2008, data released by the Ministry of Commerce and Industry today indicated. However, imports in November fell at a much slower pace compared to previous months, indicating a recovery in domestic demand and industry.
The Indian crude oil basket averaged $77 (Rs 3,588) a barrel during November 2009 with oil imports recorded at $6.38 billion (Rs 29,730 crore) over $5.95 billion (Rs 27,730 crore) in November 2008. Cumulative oil import during April-November was $50.18 billion (Rs 2,33,890 crore), 34.4 per cent lower than $76.52 billion (Rs 3,56,660 crore) in the same period last financial year.
According to analysts, the overall imports will turn positive by the last quarter of 2009-10 mainly on the back of robust demand and implementation of the free trade agreement (FTA) with the Association of South-East Asian Nations, or Asean.
“Imports will turn positive by January due to the recovery of Indian industry as we import a significant amount of capital goods. Commodity prices are also falling sharply, which will also act as a major factor,” said D K Joshi, principal economist, Crisil.
Non-oil imports dropped by 5.9 per cent to $16.50 billion (Rs 76,900 crore) from $17.53 billion (Rs 81,700 crore) in November 2008. Cumulatively, non-oil imports in the April-November period this year were 23.8 per cent lower at $120.24 billion (Rs 5,60,430 crore), than the $157.82 billion (Rs 7,35,600 crore) in the same period last year.
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Trade balance for November 2009 reached $9.69 billion (Rs 45,165 crore), compared to $12.32 billion (Rs 57,420 crore) in November 2008. During the first eight months of 2009-10, the trade deficit stood at $66.18 billion (Rs 3,08,460 crore) compared to $100.15 billion (Rs 4,66,800 crore) in the same period last year.
According to a Citibank report, trade deficit for 2009-10 could further narrow down to over $88 billion compared to $108.9 billion in 2008-09.
“Besides recovery, implementation of the India-Asean FTA will also boost import significantly and we will see it having positive growth in January. Revival of exports and imports depend on international market conditions and rise in demand. The impact of stimulus measures in this is minimal and cannot be sustained in the long run,” said Linu Mathew Philip, executive director, Centre for Trade and Development.
However, according to A Sakthivel, president of the Federation of Indian Export Organisations, the stimulus measures rolled out by the government should continue, particularly the interest rate subvention. “We expect to reach $165-$170 billion worth of exports by the end of this year,” he said.