Exports not a cause for alarm, says govt

Commerce dept says if exports of petroleum products are excluded, then decline in exports is only 9.6% in dollar terms

Even as merchandise exports fell 24 per cent the 12th month in a row in November, the steepest decline in the recent years, the government on Tuesday sought to allay fears of any alarm over decreasing outbound shipments.

"A closer look at the trade figures suggests a very different picture," the commerce department said in a statement here.

It said petroleum exports fell 52 per cent in the first eight months of the current financial year because of steep decline in raw material prices -- crude oil. If exports of petroleum products are excluded, then the decline in exports is only 9.6 per cent in dollar terms. In rupee terms, non-oil exports have declined by only 3.7 per cent.

Similarly, export in the gems and jewellery sector fell by 9.5 per cent in this period. In this case also, there is a significant decline in raw material price, namely, gold.

"Hence the declines in exports in these categories are a reflection of changing import prices," the statement said.

Decline in non-oil and non-gems and jewellery exports for the reporting period is 9.7 per cent in dollar terms and only 3.7 per cent in rupee terms.

Thus, the basic picture emerging is that excluding petroleum and gems and jewellery, India's exports have not declined significantly, the department claimed.

While several sectors have shown declines, some have shown increases --  ready-made garments of all textiles, carpets, handicrafts, jute, manufacturing, drugs and pharmaceuticals, ceramic products and glassware, tea, cereal preparations and miscellaneous processed items.

Indeed, the nominal decline must be compared with the rate of inflation.

For the purpose of measuring the real value of exports, which are essentially wholesale transactions, it is the Wholesale Price Index (WPI) rather than the Consumer Price Index which is more relevant. When the export figure in rupees is compared with the average negative WPI inflation rate of (-) 3.3 per cent, the fall in exports in real terms is likely to be negligible in volume terms, the department said.

"In short, there is no crisis in India on the export front and while there is a need for caution, there is no need for alarm," the statement said.