Export target to be achieved despite slowing growth: Industry
New Delhi: Industry bodies Wednesday expressed confidence that India's export target of USD 325 billion in this financial year would be met even as growth in overseas shipments slowed to a five-month low in November.
Exports increased 5.86 percent to USD 24.6 billion in November, the slowest pace in five months, as shipments of petroleum goods and rough diamonds declined.
"Export target for the current fiscal will be achieved easily and November figures may be seen as an aberration...Trade deficit will be within USD 140 to 150 billion in the current fiscal as against USD 190 billion recorded in 2012-13, helping to keep CAD between USD 50 to 60 billion," Federation of Indian Exporters Organisation President Rafeeque Ahmed said.
Imports last month fell 16.3 percent as inward shipments of gold and silver dropped sharply, helping to narrow the trade deficit to USD 9.21 billion, the second-lowest in this financial year. The gap in November 2012 was USD 17.2 billion.
"The continued rise in exports for the fifth month in a row is noteworthy. The first eight months of this fiscal have witnessed a nearly 23 percent decline in the cumulative trade deficit, which will considerably ease the pressure on the current account deficit and make the rupee more stable," Ficci President Naina Lal Kidwai said.
In April-November, exports grew 6.27 percent to USD 204 billion while imports stood at USD 304 billion.
"While a significant fall in trade deficit is a good development...It is largely a result of a steep import compression rather than a smart rise in exports," said Anupam Shah, Chairman of engineering exporters body EEPC.
Imports stood at USD 33.83 billion last month, the lowest level since March 2011.
"Falling imports are a welcome sign at this juncture. However, fall in the imports of capital goods owing to less investment activity and rising imports of consumer goods does not augur well," Assocham Secretary General D S Rawat said.
"The evolving trend strongly indicates that India's trade balance in 2013-14 would improve. While exports may touch USD 325 billion, imports are expected to fall to USD 450 billion," Rawat said.
Gold and silver imports in November dipped by more than 80 percent from a year earlier to USD 1.05 billion. Oil imports dipped 1.1 percent to USD 12.96 billion.
"Compression of imports is a factor...However, we will be able to meet export target of USD 325 billion," said Sanjay Budhia, Chairman of the CII Committee on Exports and Imports.
On steps to boost exports, Budhia said: "The government should come out with a scheme to expand new products basket, duty drawback rates should be restored. Besides, the government should take a holistic view and make special economic zones viable."