Merchandise exports showed initial signs of stabilisation in April, growing 36.2 per cent to $16.90 billion, from $12.40 billion in the same month last year.
Imports in the month surged by 43.3 per cent to $27.3 billion, compared with $19.1 billion in April 2009. However, experts believe the prevailing crisis in the euro zone could pose a challenge in the months ahead.
Trade deficit, or the difference between exports and imports, reached $10.42 billion in the month, compared with $6.7 billion in the same month last year, according to the initial estimates released today by the commerce and industry ministry.
“The export numbers continue to be good, but there’s nothing to go gung-ho about, as the growth is reflective mainly of a low base effect. The exports had hit absolute bottom last year. We have not yet been able to reach the pre-recession level, when the growth in exports was in the range of $15-25 billion in early 2008.... The situation in Europe is not stable, even US has not recovered fully. So, we should learn to live with lower growth rates,” Commerce Secretary Rahul Khullar had said earlier.
In the basket of imports, items that posted significant growth in April were petroleum products, which grew by as much as 70 per cent to $8.1 billion last month, from $4.7 billion in April 2009; gems and jewellery, which rose by a whopping 118 per cent to $2 billion from $900 million; chemical imports, which grew by 47 per cent to $1.3 billion from $0.9 billion; and iron and steel, which grew by 141 per cent to $1.2 billion from $0.5 billion.
The performance of exports and imports at the beginning of the financial year is an indication that the set target of achieving $200 billion worth of exports in 2010-11 would be easily achieved, according to Federation of Indian Export Organisations (FIEO) President A Sakthivel. He also demanded the government provide export credit at a concessional rate. “The interest rate in India is much above the rate at which credit is available to our competitors,” he said.
Sakthivel also stressed on the need to review the strategy of exporting in European markets in the wake of the crisis there, which, some believe, could be the beginning of yet another phase of financial downturn.
The items that did well in exports were ready-made garments, textiles, cotton yarn, engineering products and petroleum products (which grew by 80 per cent), even as handicrafts and non-basmati rice took a heavy beating. Export growth in April is indicative of good summer and spring orders.
During the month, oil imports rose 70.5 per cent at $8 billion, compared to $4.73 billion in April last year. Non-oil imports, on the other hand, rose 34.3 per cent, reaching $19.22 billion, against $14.32 billion in the same month last year.
| LOOKING UP Items that posted significant growth in imports in April: > Petroleum products: Grew by 70 per cent to $8.1 billion, compared with $4.7 billion in April 2009 > Gems and jewellery: Rose by a whopping 118 per cent to $2 billion from $900 million > Chemicals: Grew by 47 per cent to $1.3 billion from $0.9 billion > Iron and steel: Grew by 141 per cent to $1.2 billion from $0.5 billion |
“Exports are stabilising very slowly, but, if the crisis in Europe spreads, there is an impending danger to the country’s exports,” said N R Bhanumurthy, professor at New Delhi-based National Institute of Public Finance and Policy.
Earlier, Commerce and Industry Minister Anand Sharma had said the government was conducting a sectoral review and would do some minor policy tweaking, as and when required, in a sector-specific manner.
The country’s total exports reached $176.5 billion in 2009-10, compared to $185.3 billion in 2008-09, down 4.7 per cent. Imports also declined 8.2 per cent to $278.7 billion in 2009-10, compared to $303.7 billion in 2008-09.
