But, recovery is on.
For the first time in seven years, India’s exports showed an annual decline. They declined by 4.7 per cent in 2009-10, despite a recovery witnessed since November 2009. At $176.5 billion, exports last year were lower than the $185.3 billion in 2008-09. In March, exports grew a whopping 54.4 per cent.
Sectors like engineering goods, handicraft, leather, cotton yarn, readymade garments, carpets and oilmeal continue to take a beating. Growth has been seen in marine products, tea, iron ore, tobacco, plastics, fruits and vegetables.
“The annual numbers for exports have not come as a surprise. Rather it is good news, considering the fact that half of the year, exports have declined,” said N R Bhanumurthy, professor, National Institute of Public Finance and Policy. Terming the March export growth as “phenomenal”, he said this year exports are going to be robust, even though the crisis in Europe could have an impact.
Commerce Secretary Rahul Khullar, too, cautioned about the European crisis. While he remained apprehensive about exchange rate volatility, Bhanumurthy said the rupee appreciation is not going to adversely impact exports, since exporters are resorting to hedging. Rather, it would lead to import-led export growth, Bhanumurthy added.
During the first seven months of last year, exports continued to fall due to the slump in traditional markets of US, Europe and Japan. It turned positive from November due to a slew of measures announced by the government as part of the stimulus package, ranging from interest subvention on export credit, incentives for market expansion to easy lending rates.
For the current year, the government has set a target of $200 billion. “We are confident of achieving the target and will hopefully exceed it,” said Commerce and Industry Minister Anand Sharma. He released the data here today. He added the government was currently undertaking a sectoral review to assess the effectiveness of the measures announced in August for the Foreign Trade Policy of 2009-14 announced. “The review would be over in July and, depending on the results of the assessment, minor tweaking of the policy would be undertaken,” he added.
During the year, imports declined 8.2 per cent to $278.7 billion, compared to $303.7 billion in 2008-09 on account of lower crude and fertiliser prices compared to 2008-09. The trade deficit came down to $102 billion in 2009-10 from $118 billion in 2008-09. Import of vegetable oils, pulses, and gold and silver has grown 70.5 per cent, 65 per cent and 22 per cent, respectively.
“There has been a huge recovery in imports indicating rebound in production. In the last quarter, there was a huge import surge,” said Khullar.
