ASIA NEWS NETWORK
WE KNOW ASIA BETTER
India sees slowdown in export growth
Publication Date : 11-05-2012
Hit by a slowdown in the Western markets, India's export growth dropped to 3.2 per cent in April, but a sharp deceleration in import expansion resulted in trade deficit narrowing to US$13.2 billion, the lowest in a year.
The drop in the balance of trade (BoT) should reduce pressure on the rupee which has lost value by about 15 per cent against the US dollar since September 2011.
Exports in April, the first month of the fiscal 2012-13 amounted to $24.5 billion, as per the provisional figures released by commerce secretary Rahul Khullar here today.
Imports for the month grew by 3.8 per cent to $37.9, also lowest in a year.
While the pace of export expansion dropped, the silver lining is that there was annual accretion in the net value, as opposed to deceleration in March when the shipments contracted by 5.7 per cent.
For the fiscal as a whole, Khullar said: “We should be lucky to get a growth rate of 10-15 per cent...The situation in Europe is disheartening”.
He said the export data shows,” there are serious demand problem and constraints (in the Western markets)”, releasing the provisional data.
Though these are early days, Khullar said: “If deceleration in imports continues, the BoT pressure will be lower than last year and if it will stay at $13 billion for the remainder period of the year, then we will end the year with $156-160 billion”.
In 2011-12, the country's trade deficit jumped to $185 billion, highest ever in the history.
However, economists read slackening of imports as a sign of a slowdown.
The April export growth was led by engineering and pharmaceutical consignments which went up by 14.2 per cent and 33 per cent to $5.2 billion and $1.1 billion, respectively.
Export of chemicals grew by 11.4 per cent to $0.9 billion and electronics by 5.4 per cent to $0.6 billion.
However, shipments of gems and jewellery and readymade garments contracted by 25.7 per cent and 9.7 per cent to $2.6 billion and $1 billion respectively.
Khullar said that the target of $500 billion by 2013-14 looks “difficult” under the present global scenario.
He said that if the Indian rupee depreciates, it will help in increasing exports and reduction in imports. -With reports from PTI