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India's exports continue to stutter

The after-shocks of the economic slowdown in the U.S. and the impact of the debt crisis in the eurozone continue to weigh on India's overseas shipments that continued to grow at a slow pace of 6.7 per cent in December at $25 billion on year-to-year basis.

Notwithstanding the continued slide in exports, the government expressed the hope that it would be able to achieve the $300 billion target set for the current fiscal.

TRADE DEFICIT

Exports in December were higher than in November, when overseas shipments grew by just 3.8 per cent. In sharp contrast, imports grew at a faster pace of 19.8 per cent year-on-year to $37.8 billion in December, translating into a trade deficit of $12.8 billion, Commerce Secretary Rahul Khullar said here.

During April-December this fiscal, exports aggregated $217.6 billion, a year-on-year growth of 25.8 per cent. From a peak of 82 per cent in July, export growth slipped to 44.25 per cent in August, 36.36 per cent in September and 10.8 per cent in October. “If you get $80 billion exports in the remaining quarter (January-March, 2012), you are looking at close to $300 billion. And imports may touch about $460 billion,” Mr. Khullar said.

During the first three quarters of the current fiscal, imports were up by 30.4 per cent at $350.9 billion. The trade deficit stood at $133.3 billion during the period. “If the current situation continues and exports pick up during the next three months, you are looking at a trade deficit in the neighbourhood of $155-160 billion. Exports, by all major sectors, are doing well,” he said.

During April-December, 2011, engineering and petroleum exports were up by 21.6 per cent and 55 per cent, respectively, at $45.3 billion and $43.9 billion. Other sectors that registered healthy growth include gems and jewellery (38.5 per cent), ready-made garments (23.7 per cent), electronics (21.1 per cent), drugs (21.5 per cent), marine products (32.2 per cent) and plastics (43 per cent). “Even today, exports have grown, taking into account all the corrections that have been made, all the deceleration that has taken place. At this rate, you are looking at a growth rate of 20 per cent during the fiscal. It could be more,” he said.

During the first three quarters of 2011-12, petroleum imports were up by 40.4 per cent at $105.6 billion. Other sectors which registered growth include gems and silver (53.8 per cent), machinery (27.7 per cent), electronics (21.1 per cent), chemicals (23 per cent), coal (62 per cent), fertilizers (35 per cent), vegetable oil (55 per cent) and iron and steel (12.1 per cent).

On the export target of $500 billion by 2013-14, he said if demand did not improve in Europe and the U.S. in the coming months, it would be difficult to achieve the target.

“The year 2012 is going to be very difficult, it's too uncertain at this point of time. There are uncertainties prevailing in euro land and in the U.S.,” he said.

Responding to the export figure for April-December 2011, FIEO President M. Rafeeque Ahmed said that while 25.8 per cent growth in first nine months looked impressive but the same was much less than 33.2 per cent growth achieved in first eight months of the current fiscal and pointed to challenging times ahead.

He said that percentage growth in respect of most of the sectors had also come down at the disaggregated level.

“However, with still three months to go, we would be able to achieve over $280 billion in 2011-12.”