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Exports hit demand barrier in Apr, imports remain muted

FIEO fears lay-offs as labour-intensive sectors face tough scenario

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India’s trade deficit remained stagnant at about $13 billion in April, compared to the year-ago period, after touching a record high of $185 billion, or 10 per cent of the gross domestic product (), in 2011-12. If this trend persists, the , which had touched four per cent of GDP in the first nine months of the previous financial year, may be narrowed.

Exports rose just 3.2 per cent to $24.5 billion in April, against a growth of over 31 per cent in the same month last year, according to initial figures released by Commerce Secretary .

Slackening demand abroad weighed more heavily than the falling rupee, while sectors like textiles reeled under a plethora of problems. The jems & jewellery segment saw disruption due to protests over Budget proposals. Engineering exports, however, rose 14.2 per cent.

Imports, too, rose by a meagre 3.8 per cent to $37.9 billion in April, against 15.77 per cent in the year-ago period. This was the slowest import growth since October 2009, when growth in imports stood at $25.9 billion. While petroleum products imports rose just seven per cent to $13.9 billion due to falling global crude oil prices, pearls and precious stones and gold and silver imports contracted. Trade deficit rose to $13.4 billion, against 13 billion in April, 2011. The said the contraction in textile export growth and low expansion in outbound shipment of a few did not augur well for employment generation, and could even lead to lay-offs.

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