India may miss target for FY13 exports, Rupee likely to remain choppy: Exim Bank
With the global economy remaining choppy, India's exports fell 6.2% yoy to $167 billion during April-October 2012, which means the current account deficit (CAD) may widen and overall economic growth may drop to less than 6% in 2012-13. With exports having fallen in six out of seven months this fiscal, capital flows remain uneven and market sentiment continues to be subdued. Ranganathan said, “I apprehend volatility in the rupee to continue. We must strive for lower CAD. If the gap is lower, the rupee volatility will be more.”
The rupee has been on a roller-coaster ride, starting the fiscal at Rs 50.84 to a dollar, touching R 57.13 by end June, again falling to R 51.75 by early October and weakening to R 55 recently.
Analysing the export performance, Ranganathan said while major export items like petroleum products, gems and jewellery, agri products, pharma and chemicals are “not showing signs of dismay”, there could be a sharp drop in mineral exports following curbs on mining in some parts of the country. The mining sector, which contributed about 7% of total exports even last year, is mired in controversies over illegal activity that have prompted some state governments, including those of Goa, Karnataka and
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