Govt confident of meeting $200-bn export target for whole year.
India’s exports shot up by over 23 per cent in September, the highest level in nearly two years, and the trade deficit shrunk to $9.12 billion.
Buoyed by the performance in the first half of the financial year, the government said exports were on course to meet the $200-billion target for the year, despite the recent appreciation of the rupee.
According to the data released by Commerce Secretary Rahul Khullar today, exports grew by 23.2 per cent in September to $18.02 billion, while imports rose by 26.1 per cent to $27.14 billion. As a result, the trade deficit shrank to $9.12 billion, compared to $13.06 billion in August, which was a 23-month high.
During the first six months of 2010-11, exports went up by 27.6 per cent to $103.3 billion. On the other hand, imports clocked 30 per cent growth during the April-September period reaching $166.5 billion, according to the initial figures released by the commerce secretary.
Khullar said that despite the trade deficit having “sobered up”, it remained a worry. “We still need to be concerned about this. But, still, it is within manageable limits.”
Commerce Minister Anand Sharma, however, played down the concerns, saying that India always had an adverse trade balance as it is a large importer of several commodities ranging from machinery to petroleum.
“In the first six months, we have done well. We are very much on track to achieve 15 per cent growth in exports. India’s exports will cross $200 billion (for the whole year),” he said.
While small exporters and large companies such as Infosys have complained about the recent appreciation of the rupee, Sharma played down the concerns, saying the exchange rate has not yet reached a stage where it could be referred as “volatile”. “It is RBI and the finance ministry who are keeping a close watch. Exporters have been given the option to avail dollar credit,” the minister added.
Khullar, however, said the rise in the value of rupee against the dollar and other currencies could impact winter orders.
Sharma, who left for a week-long visit to Japan, Malaysia and Vietnam today, said he would convene a meeting with the banking secretary and chiefs of all major banks to find out how much of the dollar credit had been made available to the exporters so far and if there were any changes required.
The Federation of Indian Export Organisations said the high volatility in the exchange rate was a cause of concern. It has urged for the government’s intervention in checking the rise in rupee by restricting the foreign institutional investors.
Some of the merchandise exports that grew at a faster pace during the first six months included petroleum products (54 per cent), cotton and fabrics (45 per cent), iron ore (60 per cent), gems and jewellery (21 per cent), spices and condiments (35 per cent) and drugs (12 per cent). A part of the increase was due to the price effect, Khullar said.
