Exports rise after 8 months, trade deficit still second highest ever
New Delhi: Making a marginal recovery, India's exports entered the positive zone after a gap of eight months, recording a growth of 0.82 percent to USD 25.58 billion in January.
The improvement in exports has been mainly on account of better performance by sectors like engineering goods, textiles and gems and jewellery. The exports have been contracting since May 2012.
The trade deficit, which is the difference between imports and exports, however, continued to be cause of concern. It soared to a three-month high of USD 20 billion.
The country's exports had stood at USD 25.37 billion in January, 2012.
Imports too rose by 6.12 percent to USD 45.5 billion in the month under review.
However, during the April-January period of 2012-13, the country's overseas shipments shrunk by 4.86 percent to USD 239.6 billion.
"I hope with exports growing marginally in January, it should help us narrow the trade gap at the close of the fiscal," Commerce Minister Anand Sharma said after launching the Nasscom national summit in Mumbai.
Commenting on the numbers, Commerce Secretary S R Rao told reporters: "Export performance in January has shown slightly positive results which is a matter of a bit of happiness and cumulative exports too have shown slight arrest in the fall."
Rao hoped that the incentive package, which came into force from January, would help the country's exports to "improve significantly" in the coming months.
"In the last couple of months, there is an arrest in the fall of exports. So we wish forward momentum continues and hopefully the additional incentives should result in better traction as we go forward," he added.
In October 2012, India's exports declined to 1.63 percent from 11 per cent in September. And in December, the shipments declined by 1.9 percent from 4.17 percent in November 2012.
India's exports were declining mainly due to the global slowdown in demand.
However, Rao expressed concern over widening trade gap.
Imports during the 10-month period rose by 0.01 percent to USD 406.8 billion. Trade deficit during the period stood at USD 167.16 billion.
"The worrying aspect as usual is the widening trade deficit. Figures show that there is a substantial increase in the imports of petroleum and crude oil which is widening the trade deficit," he said.
Since April 2012, petroleum and crude oil imports have shown an increase. While in August the imports grew by 3 percent, in September it jumped by 30 percent and in October by 31 percent.
In November, December and January, petroleum and crude oil imports went up by 16.8 percent, 23.6 percent and 7 percent respectively.
Rao said these imports are increasing mainly because of its high use in power generation.
"Unfortunately at least in 3-4 states power situation is adverse. In Tamil Nadu and Andhra Pradesh, power cuts are very distressing and it is close to 16 hours," he said.
In Mumbai, Commerce and Industry Minister Anand Sharma, however, expressed optimism that the slight uptick in January exports would help close the trade gap.
Sharma hoped that the marginal growth in exports "should help us narrow the trade gap at the close of the fiscal".
The export sectors which registered positive growth cumulatively include rice, tobacco, oil meals, carpet, pharmaceuticals and drugs.
Fall in the exports of engineering, textiles and gems and jewellery, the main contributors, have also been arrested.
While engineering exports declined by 4 percent, gems and jewellery and textiles exports shrunk by 0.6 percent and 8 percent respectively during April-January period.
"There is a recovery in these sectors," DGFT Anup Pujari said.
Oil imports in January grew by 6.91 percent to USD 15.89 billion from USD 14.87 billion in the corresponding period last year.
Non-oil imports, too, increased by 5.71 percent during the month under review to USD 29.68 billion.
During April-January 2012-13, oil imports grew by 11.56 percent to USD 140.42 billion from USD 125.87 billion in the corresponding period of previous fiscal year.
However, non-oil imports during the period declined by 5.17 percent to USD 266.43 billion.
Reacting to the data, AEPC Chairman A Sakthivel said easy availability of cheaper export credit to the garment industry was the need of the hour.