Exports from India stood at $25 billion in December, a dismal 6.7 per cent rise over the year-ago period’s exports of $23.4 billion, owing to the crisis in the euro zone. Imports rose 19.8 per cent to $37.7 billion, compared with $31.5 billion in December 2010, raising the trade deficit to $12.8 billion.
However, despite a slowdown in the growth in exports by the second half of the financial year, exports during the April-December period stood at $217.7 billion, 25.8 per cent higher than the corresponding period of the previous financial year, when these stood at $173 billion. Imports, too, had an impressive run during this period, reaching $351 billion, compared with $269.2 billion in the year-ago period, growing 30.4 per cent, according to data released by the ministry of commerce and industry.
The trade deficit during first nine months of this financial year ballooned to a worrisome $133.3 billion. According to commerce secretary Rahul Khullar, it is expected to reach $155-160 billion by the end of this financial year.
“Considering the high oil prices and the deceleration in exports, we expect the trade deficit to widen to $169 billion this financial year and $190 billion in 2012-13. The higher trade deficit is likely to result in a slightly wider current account deficit of $64 billion, 3.5 per cent of the GDP (gross domestic product) in 2011-2012 and $74 billion, or 3.6 per cent, in FY13,” said Rohini Malkani, economist, Citi India.
The government had earlier set a target of $300 billion of merchandise exports this financial year. However, considering the poor run since August, exporters are unsure of achieving the target.
M Rafeeque Ahmed, president, Federation of Indian Export Organisations, said exports would reach only $280 billion due to the severe demand shortage in European markets.
It followed two months of solid gains and largely reflected a drop in auto production
Members also agreed to expedite talks on the Regional Comprehensive Economic Partnership Agreement (RCEP)