In a major turnaround, India's exports in December 2010 went up by an impressive 36.4 per cent to $22.5 billion, highest in 33 months, while imports contracted by 11.1 per cent to $25.1 billion, lowest in the last 14 months. This led to a narrow trade deficit of $2.6 billion, the lowest in three years.
“The U.S. markets have been doing pretty good…even EU markets are good,” Commerce Secretary Rahul Khullar told journalists here. Remarkable export figures were also attributed to diversification of India's export markets. For instance, 112 per cent rise in engineering exports was helped much by orders from Latin American countries like Columbia, he added.
Mr. Khullar further said that thanks to lowering of trade deficit, India's worries on overall current account deficit would be abated. The overall trade gap may not be more than $120 billion for this year against earlier apprehensions of $130-135 billion. Good exports figures may now help India surpass exports target of $200 billion in 2010-11 and reaching $215-225 billion.
In December, the export sectors that registered higher growth includes engineering (112 per cent), electronics (88 per cent), man-made fibres (30 per cent), yarns (65 per cent) and drugs (810 per cent).
During April-December 2010-11, merchandise export grew by 29.5 per cent to $164.7 billion. Imports too rose by 19 per cent to $247.1 billion over the year-ago period. “Normally exports in the last quarter is about $50-60 billion… incentives announced for exporters, which were hit hard by the global slump in demand, in January last year also helped,” Mr. Khullar added.
He further said that going by these cumulative numbers, exports would grow by about 20 per cent over the previous year. In 2009-10 shipments stood at $176.5 billion. The trade deficit during the first nine months stood at $82.4 billion. During the period, engineering exports grew by over 60 per cent, year-on-year, to $38.8 billion. “If they carry on at this rate, they will cross $55 billion by end of the fiscal and that will be an all-time high,” Mr. Khullar added.
Other sectors that excelled include gems and jewellery (10 per cent), electronics (35 per cent), man-made fibre (11 per cent), yarn (55 per cent), carpets (43 per cent), drugs (13 per cent), chemicals (20 per cent), plastics (28 per cent) and leather (10 per cent).
On imports, Mr. Khullar said virtually all imports categories in December 2010 registered negative growth — petroleum (minus 16 per cent), fertiliser and gold and silver (minus 30 per cent) and coal (minus 36 per cent). However, in April-December this fiscal, imports registered positive growth.
The sectors include petroleum (67 per cent), vegetable oil (34 per cent), chemicals (35 per cent), iron and steel (32 per cent).
According to the Federation of Indian Export Organisations (FIEO) President Ramu S. Deora, “India's exports would easily touch $220 billion by the end of 2010-11.
“India should explore the possibility of increasing its focus areas so as to achieve a quantum jump in exports.”