Exports rise 4.2% in Feb; imports up 2.6%

With imports up 2.5% trade deficit declines marginally in Feb

Exports rose 4.2 per cent to $26.25 billion in February, compared with $25.2 billion in February 2012. This is a consecutive month’s rise in exports, according to data released by the Ministry of Commerce and Industry today.

This financial year, only three months recorded a rise in exports — April 2012 (3.23 per cent), January (0.82 per cent) and February (4.23 per cent).

In February, imports grew just 2.65 per cent to $41.18 billion, compared with $40.12 billion in February 2012. The trade deficit declined to $14.92 billion, compared with $20 billion in January. The relatively slow growth in imports increases the likelihood of India’s current account deficit narrowing. (TRADE PICKS UP)

“Europe is performing better now. The decline has been arrested. Sectors which have large weightage, especially engineering and refined oil, have started performing better. There is also a marginal improvement in textiles exports,” Commerce Secretary S R Rao told reporters, adding the rice, oil meals, chemicals and pharmaceuticals segments had also fared well.

Rao said it was expected the government would announce the annual supplement to the Foreign Trade Policy by the end of this month. “We are actively involved in consultations with chambers, export promotion councils, various departments and state governments and are trying to arrive at a package of incentives that would be announced soon.”

On March 22, Anand Sharma, minister of commerce and industry, would convene a meeting of the Board of Trade.

Cumulative exports during the April-February period fell 4.03 per cent to $265.94 billion from $277.12 billion in the year-ago period. If the $300-billion export target for this financial year is to be met, exports in March have to stand at more than $34 billion. Even if the $300-billion target is met, exports would still be lower than the commerce department’s target of $360 billion. It would also be lower than $305-billion exports recorded in 2011-12. For the April-February period, imports rose 0.25 per cent to $448.04 billion, against $446.94 billion in the corresponding period of 2011-12, data showed.

As a result, the trade deficit for the April-February period stood at $182.09 billion, against $169.81 billion in the corresponding period of 2011-12. In the last financial year, the trade deficit had reached a record high of $185 billion.

Ajay Sahai, director general of the Federation of Indian Export Organisations, said this year, the trade deficit might stand at $190-195 billion.

The high trade deficit is leading to a rise in the government’s current account deficit (CAD). In the first six months of this financial year, CAD stood at 4.6 per cent of the gross domestic product, against four per cent in the corresponding period of the previous financial year.

In February, oil imports stood at $15.15 billion, 15.45 per cent higher than in February 2012. Oil imports during April-February stood at $155.57 billion, 11.92 per cent higher than in the year-ago period. Non-oil imports stood at $26.03 billion in February. This was 3.57 per cent lower than the $26.99-billion non-oil imports in February 2012. Non-oil imports in April-February stood at $292.46 billion, 5.03 per cent lower than in the year-ago period.

Director General of Foreign Trade Anup K Pujari said currently, India had trade imbalance with 83 countries, while it was trade-surplus with 152 countries.

“We are eagerly awaiting the announcement of the Foreign Trade Policy, where important issues such as SEZs (special economic zones), fiscal incentives, reducing the cost of credit, as well as transaction costs, would help Indian exporters become more competitive,” said Sanjay Budhia, chairman of the Confederation of Indian Industry’s National Committee on Exports and Imports.

Apparel Export Promotion Council chairman A Sakthivel said growth in exports for two consecutive months indicated a gradual recovery in the economy.