)
A month after a contraction, merchandise exports in November rose 7.3 per cent to $26 billion, compared to $24.2 bn in the same month last year. However, imports grew 26.8 per cent in the month, fastest in this financial year, reaching $42.8 bn over the $33.8 bn a year before, with inbound shipments of gold up 500 per cent.
The trade deficit in November, as a result, widened to an 18-month high of $16.9 bn. Before this, it was only higher in May 2013, at $20.1 bn.
However, many economists said the current account deficit would not surpass two per cent of India's gross domestic product (GDP) this financial year.
Total exports during April-November, first nine months of 2014-15, were $215.75 bn, about five per cent higher from the $205.4 bn in the corresponding period of 2013-14. With four more months before the year ends, exporters believe the government target of $325 bn will be met. (GAP WIDENS)
“We are targeting $340 bn. December exports should also be good but we have to push hard in the next months to come,” said Ajay Sahai, director-general, Federation of Indian Export Organisations.
He said many sectors which had declined in October's export figure from a year before had shown positive growth this month. Some of these are gems and jewellery, cotton, manmade yarn, readymade garments and coffee.
However, refinery products, the second highest item of exports after engineering goods, fell 14.15 per cent to $4.2 bn in November against $4.85 bn in the same month last year, due to a fall in global oil prices.
Cumulative imports reached $316.4 bn over April-November, up 4.65 per cent compared to the $302.3 bn in the same period last year, showed data issued by the ministry of commerce and industry. This was the fastest pace of import growth in this financial year so far. It is attributed by many to gold imports, up 571 per cent to $5.6 bn in November from $835.8 million in the same month last year.
Oil import in November declined 9.7 per cent to $11.7 bn against $13 bn in the same month last year. Its total from April fell 1.6 per cent to $106.6 bn, compared to $108.3 bn in the corresponding period of last year.
“Gold imports were mainly responsible for such a rise in imports in November. The fall in crude oil prices will offset this rise. But with inflation coming down, I think demand for gold is going to moderate. Overall, the current account deficit is expected to remain below two per cent of the GDP this fiscal, a good sign for the economy,” said D K Joshi, chief economist, CRISIL.
According to Soumya Kanti Ghosh, chief economic advisor at State Bank of India, the surge in November imports were due to both gold and coal. "Both have led to the rise. A larger decline in oil imports will be seen in the coming months,” he said.
In November, non-oil import rose 49.6 per cent to $31.1 bn from $20.8 bn in November 2013. Cumulative non-oil import rose 8.1 per cent to $209.8 bn during April-November over the $194 bn in April-November 2013.
