Economic slowdown in the U.S. and the serious eurozone debt crisis impact shipments
The impact of the economic slowdown in the U.S. and the serious eurozone debt crisis have started trickling down to India with the country registering a poor 3.8 per cent growth in exports in November, 2011 — the slowest in the last two years — raising fears that the $300-billion target for the current fiscal could well be missed.
In November, overseas shipments amounted to $21.48 billion. The growth rate is the lowest since October, 2009, when it contracted by 6.6 per cent. In sharp contrast, imports grew at a faster rate of 24.5 per cent year-on-year to $35.9 billion during the month, translating into a trade deficit of $13.6 billion, according to data released by the Commerce Ministry on Monday.
From a peak of 82 per cent in July, export growth slipped to 44.25 per cent in August, 36.36 per cent in September and 10.8 per cent in October.
In November, oil imports grew 32.28 per cent at $10.3 billion, while non-oil imports rose by 21.69 per cent to $25.6 billion vis-a-vis the year-ago period.
During April-November, exports aggregated to $192.69 billion, a year-on-year growth of 24.55 per cent, thanks to the surge witnessed in the early months of this fiscal. A steady rise in imports by 30.24 per cent to $309.53 billion during the eight-month period resulted in the trade gap widening to $116.83 billion.
Fears are already being expressed that exports may touch $275 billion this fiscal, well short of the $300-billion target set by the government.
During April-October, oil imports stood at $94.11 billion, an increase of 42.6 per cent year-on-year.
Non-oil imports rose by 25.4 per cent to $215.4 billion during the period.
In a statement Federation of Indian Export Organisations (FIEO) President Ramu Deora maintained that despite all odds and dismal global situation, the country's exports would touch $275 billion by the end of this fiscal.
He, however, cautioned that the trade deficit would not be less than $150 billion in 2011-12.
Mr.Deora felt that to boost exports and arrest the trade deficit, the government should provide export finance at a concessional rate not more than 7 per cent and 9 per cent business houses. It is understood that keeping in view the present global downward trend even in England, the European Central Bank (ECB) offered 25-basis point reduced rate of interest for supporting their export industry.
He said that with the abnormal increase in the cost of inputs and packaging material, exports were day-by-day becoming uncompetitive nullifying the scope of margins offered by the rupee fall. “It is of utmost important that we have consistency in our reforms and policies in order to maintain our image as a reliable supplier in the global market and any stumbling blocks that halt reforms conveys a wrong signal overseas adversely affecting inflow of dollar in the country,'' he added.