Sep imports fall 31% even as exports look up

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New Delhi: Even as the dip in India’s exports narrowed in September compared to the levels seen in previous months, the pace of contraction in imports has remained unchanged as appetite for foreign goods in the country remained weak.

The commerce ministry data released on Tuesday showed that imports during September contracted 31.3% and stood at $ 21.4 billion. In the same month, exports from the country contracted at 14%, lowest since December 2008 and stood at $13.6 billion due to enhanced sale of gems and jewellery, engineering goods, petroleum products, readymade garments, drugs, pharmaceuticals and fine chemicals in foreign markets.

The commerce ministry expects India’s exports during 2009-10 to be in the range of $ 165-175 billion and is in the process of finalising another fiscal package to boost overseas sale of goods produced in the country. While exports in the April to September period dipped 28.5% ($77.85 billion), imports contracted at a faster pace of 32.7% ($124.58 billion). Trade deficit during September contracted nearly 50% and stood at $7.76 billion.

Economists expect the pace in imports to pick up in the coming months. “Domestic industrial activity is on rise as shown by the IIP data. The impact of this on imports will be seen with a lag,” Yashika Singh, head-operations, Economic Analysis Group Dun & Bradstreet told FE.

“Due to both the easing of the base as well as sequential up-ticks, we expect a rapid improvement in the yearly export data over the next quarter, moving into positive territory by December,” said Tushar Poddar, vice-president & chief economist, Goldman Sachs, India, in a report.

Imports continued to contract sharply in September—it had dipped 32.4% in the previous month—as India’s oil import bill was lesser than what it was in the year ago period. In the month under consideration, oil imports contracted 33.5% and stood at $ 6.34 billion. In the six months ending September, the value of oil imports was 45% less ($ 34.8 billion) than what was seen in the corresponding period of 2008-09.

In addition, India imported lesser amount of capital goods and raw material needed by the industry during September, as shown by the non-oil import figures, which was 30.4% less than what was recorded in the year ago month, and stood at $15.03 billion.