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Pushed up by the rupee depreciation and recovery in overseas demand, merchandise exports surged by double digits in the third straight month to clock 11.15% growth at a six-month high of $27.68 billion dollars in September this year against $24,90 billion in the same month of 2012-13. On the other hand, imports fell by a whopping 18.10% to touch 30-month low of $34.43 billion dollars against $42.05 billion as the government compressed inbound shipments of precious and non-essential products.
Consequently, trade deficit fell to the lowest level in two-and-a-half years at $6.76 billion, providing some respite to the government struggling hard to bring down current account deficit which touched 4.9% of GDP in the first quarter of the current financial year.
Consequently, trade deficit fell to the lowest level in two-and-a-half years at $6.76 billion, providing some respite to the government struggling hard to bring down current account deficit which touched 4.9% of GDP in the first quarter of the current financial year.
According to official figures released here today, exports were up 5.14% at $152.10 billion in the first six months of the current financial year against 144.67 billion dollars. This prompted commerce secretary S R Rao to tell reporters that at least exports target of $325 billion during 2013-14 would be met against $300 billion in the previous financial year. He, however, did not forget to say that exporters body Federation of Indian Export Organisations (FIEO) is optimistic that outbound shipments would reach $350 billion in 2013-14.
Before September, exports were up 13% in August and 11.64% in July, after contracting for two straight months of 2013-14. In April, exports had inched up 1.68%.
Imports, on the other hand, declined 1.8% at $23.22 billion during April-September, 2013-14 against $23.65 billion in the corresponding period of the previous fiscal. This largely happened as the government tightened imports of precious metals and non-essential items. The finance ministry had hiked import duty on gold to 10% from earlier eight% in August, while also raising the duties on inbound shipments of platinum, silver and flat screens.
Consequently, imports of gold and silver declined sharply by 82% at $0.8 billion in September this year against $4.6 billion in the same months last year. For the first six months, imports of these precious items rose 8.71% to touch $23.1 billion against $21.2 billion a year ago.
This led to a massive 24.19% decrease in imports of non-oil products at $21.24 billion in September, 2013-14 against $28.02 billion in the same month of the previous year. These imports contracted 4.55% at $149.35 billion in the first six months of the current financial year against $156.48 billion in the corresponding month of the previous financial year.
Not only that oil imports too fell in September year-on-year due to softening global crude prices, which is a rarity in India's trade numbers. These imports were down almost 6% at $13.19 billion in September against $14.03 billion in the same month a year ago. For the first six months, imports were up 3.58% at $82.88 billion against $80.01 billion a year ago.
As such, trade deficit was lower by over 14.5% at $80.13 billion in April-September 2013-14 against $91.82 billion in same months a year ago.
Rao refused to peg trade deficit figures for 2013-14 as a whole. However, Yes Bank analysis projected it to fall to $179 billion for the current financial year against $196 billion in 2012-13.
The widening trade deficit had broadened current account deficit to $88 billion or 4.8% of GDP in 2012-13. This year, the government expected CAD to come down to $70 billion or 3.7% of GDP. The government can take comfort from the fact that Yes Bank pegged it at $60 billion for 2013-14.
