India?s exports and imports started turning around in October-November 2009 after contracting sharply in the global recession. However, for the full year ?09-10, India?s exports and imports declined by 3.6% and 5.6%, respectively.

But exports from public sector undertakings (PSUs) is increasingly becoming a significant factor in the country?s export performance. This is revealed in an analysis of the export and foreign exchange earnings performance of 42 major PSUs during the last three years, that is, ?07-08, ?08-09 and ?09-10.

The 42 PSUs accounted for roughly 6% of India?s total export earnings in ?09-10.

But this broad picture of optimism hides a disturbing trend in the export performance of PSUs, though it can be largely attributed to uncertainties in the external environment.

Of course, foreign exchange earnings of the 42 firms went up, only that the growth rate was slower in ?09-10 at 2.3% compared with 8.2% in ?08-09. In actual terms, their forex earnings rose from Rs 46,887 crore during ?07-08 to Rs 50,727 crore during ?08-09 and further to Rs 51,895 crore during ?09-10.

The FOB value of exports also steadily increased from Rs 45,717 crore to Rs 51,311 crore during the study period.

However, the forex earnings-to-net sales ratio actually fell from 6.19% during ?07-08 to 5.51% during ?08-09; though the ratio rose to 6.04% during ?09-10, it was, as can be seen, still less than the figure of FY08.

The ups and downs in exports were reflected in foreign exchange spend. Total forex expenditure, including imports, was at Rs 2.83 lakh crore, Rs 3.61 lakh crore and Rs 3.49 lakh crore, respectively, in the last three years.

Another notable feature is that four of the 42 selected PSUs exported (FOB value) more than 15% of their sales during ?09-10.There was more than 30% growth in the FOB value of exports of one PSU, namely MRPL. Six PSUs?IOC, MRPL, BPCL, HPCL, ONGC and MMTC?recorded more than Rs 3,000 crore of exports (FOB value) during ?09-10.

Among the 42 PSUs, forex earnings growth in ?09-10 turned out to be negative for 13 companies, including IOC, MRPL, MMTC, BHEL and NTPC.

IOC?s forex earnings growth was a negative 8.1% during ?09-10 from a positive growth of 30.6% during ?08-09. A contrary trend was seen in the case of BPCL, HPCL, TN Newsprint, Power Grid Corporation and Hind Organic Chem. The growth of foreign exchange earnings of BPCL turned out to be a positive 56.9% from a negative growth of -11.7% during ?08-09.