Ind-Ra Market Wire: India to Miss FY14 Exports Target

India Ratings & Research (Ind-Ra) believes India will miss its FY14 exports target of USD325bn due to negative growth in exports (3.7% yoy) in February 2014. Exports valued at USD26.7bn in February 2014, puts the cumulative exports over April 2013-February 2014 at USD282bn, leaving a gap of USD43bn from the FY14 exports target. Ind-Ra believes it is quite unlikely that this gap would be filled in just one month as exports in most of the months of FY14 have fluctuated between USD24bn-USD27bn.

Imports in February 2014, valued at USD33.8bn, witnessed a negative yoy growth of 17.0%. This fall was mainly due to a sharp decline in non-oil imports (24.5%). With a slowing economy, this is not unexpected, but has had a positive impact on the overall trade balance. Trade deficit declined to USD8.1bn in February 2014 from USD9.9bn in January 2014.

On a cumulative basis, exports at USD282bn over April 2013-February 2014 grew 4.8%, while imports at USD411bn declined 8.7%. This resulted in the trade deficit narrowing to USD128bn over the same period. Ind-Ra, therefore, expects current account deficit to come down to 2.2% of GDP in FY14 as against 4.8% of GDP in FY13.

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