India?s exports rose an impressive 49.7% in February over the previous year, the highest growth in any month in the fiscal year that has just ended, allaying fears about the high trade and current account deficits. Exports in the first 11 months of 2010-11 exceeded the annual target of $200 billion by a good $8.2 billion, which also represented an increase of 31.4% over the year-ago period.
Merchandise exports in February stood at $23.5 billion compared with $15.7 billion in the corresponding month a year ago, trade data released here on Friday said. Export sectors that have performed well during the month include petroleum (34% growth), engineering products (81%), electronic goods (40%) and cotton yarn (43%).
In January, exports had grown 32.4% Commerce secretary Rahul Khullar said that going by this trend, the country?s exports in 2010-11 would be $230-235 billion, and imports $350 billion, and the trade deficit $105-115 billion.
What has given an impetus to exports is a turnaround, albeit slow, in the developed markets, as also a growth in demand from Asian and Latin American markets, as Ramu Deora, the president of apex exporters’ body Fieo, put it.
Imports of goods grew much slower at 21.2% in February to reach a total of $31.7 billion against $26.1 billion in the previous year. Total imports in the first 11 months of the fiscal grew 18% to $305.2 billion from $258.7 billion. Owing to the higher exports growth, the balance of trade was estimated at $97 billion compared with $100 billion during the same period of the previous year.
Khullar had earlier said that the government expects exports to touch the $225 billion mark by the end of the calendar year. Trade analysts said that the commerce ministry’s decision to diversify export markets and the product basket has proved to be fruitful. In fact, last month commerce minister Anand Sharma released the draft paper which aims to double exports to $540 billion by the end of 2014.
Joshi said the government must take cognizance of two important developments on the trade front.
Joshi said that the West Asian crisis could lead to higher oil prices, which would inflate the country?s import bill. Further, the earthquake in Japan could reduce the supply of essential components from Japan, especially for the automotive sector. ?My sense is that (Indian exporters?) exposure to Asia is rising,? Joshi added.
Oil imports in February dipped by 0.3% to $8.21 billion from $8.24 billion in February 2010. However, non-oil imports grew by 31% to $23.48 billion from $17.9 billion.
During April-February 2010-11, oil imports grew by 12.4% to $88.17 billion from $78.41 billion in the same period a year earlier, the data said.
Non-oil imports during the period also went up, by 20.4% to $217.12 billion from $ 180.33 billion in the corresponding year-ago period.
