Exports highest in 2 years at $18.02 bn

India's exports shot up by an annualised 23.2 per cent in September, 2010, to a two-year high of $18.02 billion, but even faster import growth increased concerns over the country's widening trade gap.

The country is on track to surpass the export target of $200 billion for the current fiscal, Commerce and Industry Minister Anand Sharma said in New Delhi on Monday.

In the April-September period of the 2010-11 fiscal, exports aggregated to $103.30 billion, a 27.6 per cent increase vis-a-vis the year-ago period.

"In the first six months of this year, we have done well. We are on very much on track. . . to cross $200 billion," Sharma said.

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Earlier, releasing the export-import figures for September, Commerce Secretary Rahul Khullar said the growth could be partly attributed to the low base in the previous year and increasing prices.

However, "this is the first month in which, for the last two years, exports this year are higher than 2008-09 and 2009-10," Khullar said.

India's exports were severely impacted due to the global economic slowdown and totalled only $14.6 billion in September, 2009.

India's exports were valued at $15.8 billion in September, 2008.

After remaining in the red for 13 months in a row, exports have been growing since November, 2009.

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Earlier, releasing the export-import figures for September, Commerce Secretary Rahul Khullar said the growth could be partly attributed to the low base in the previous year and increasing prices.

However, "this is the first month in which, for the last two years, exports this year are higher than 2008-09 and 2009-10," Khullar said.

India's exports were severely impacted due to the global economic slowdown and totalled only $14.6 billion in September, 2009.

India's exports were valued at $15.8 billion in September, 2008.

After remaining in the red for 13 months in a row, exports have been growing since November, 2009.

. . .

However, imports grew even faster, by 26.1 per cent to $27.14 billion in September. Cumulative imports in April-September, 2010, added up to $166.5 billion, translating into a massive trade gap of $63.2 billion during the six-month period.

"We still need to be concerned about the balance of trade deficit," Khullar said.

Crude oil, gems and jewellery and edible oil constitute the major part of the country's import bill.

In the first six months of the fiscal, imports of petroleum and related items went up by 54 per cent, gems and jewellery by 21 per cent and engineering items by 41 per cent.

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The trade deficit in September alone was $9.12 billion, the secretary said.

However, this was lower than the $13-billion deficit in August.

Except for iron ore, electronic items, man-made fibre and handicrafts, exports from other sectors, including gems and jewellery, engineering goods and apparels, witnessed growth.

Apex exporters' body Federation of Indian Export Organisations, however, said the strengthening rupee against the dollar was a cause for concern and the Reserve Bank should intervene to check the volatility.

The rupee has appreciated by about 5 per cent against the dollar since January.

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On strengthening of the rupee, Commerce and Industry Minster Anand Sharma said: "We do not see that we have reached that stage where the rupee can be termed as volatile."

Secretary Khullar, too, said the exchange rate would not affect export contracts that have already been entered into with buyers, but may impact future ones.

The rupee strengthened by 18 paise to Rs 44.40 against the US currency at the Interbank Foreign Exchange in morning trade on Monday, tracking dollar weakness against other major currencies.

The exports sectors that performed well in the April- September period include plastics (34 per cent growth), gems and jewellery (21 per cent), engineering goods (41 per cent), iron-ore (60 per cent), spices (35 per cent), drugs (12 per cent) and chemicals (26 per cent).

"In most of the sectors, we are seeing rebound. Even in areas like textiles," Khullar added.

On the other hand, imports of fertilisers during the period were up by 43 per cent, while inbound shipments of crude and related items (30 per cent), vegetable oil (55 per cent), gems and precious stones (130 per cent), gold (16.7 per cent), iron and steel (58 per cent) and machinery (17.5 per cent) also registered an increase.

However, imports of electronic items and transport equipment contracted by 10.5 per cent and 32 per cent, respectively, during the period.

Khullar also said India's edible oil imports are likely to increase to 9.5-10 million tonnes this fiscal. Last year, edible oil imports stood at about 8.5 million tonnes.