Exports in February grew 4.3 per cent to $24.6 billion while in a massive contrast, imports grew 20.6 per cent in the same month to $39.8 billion, resulting in a trade deficit of $15.2 billion, the highest since November 2011.
Total exports during April-February rose 21.4 per cent to $267.4 billion and imports reached $434.2 billion, up 29.4 per cent. That made for a trade deficit of $166.8 billion, commerce secretary Rahul Khullar said here on Friday while releasing the initial estimates. The official data will be released on April 1. "There is a large ballooning of the trade deficit. October onwards, export started coming down sharply, whereas the lag in import deceleration was larger," Khullar said.
The steady deceleration in export was mainly due to slowing demand in Europe and the US, where almost 35 per cent of India’s export goes. Growth in export plummeted from 82 per cent in July to 4.3 per cent in February. Khullar said exports might end the financial year at $292-298 billion and imports at $470-480 billion. Hence, the trade deficit for the whole year would be $175-180 billion.
Last month, the Prime Minister’s Economic Advisory Council had forecast that the trade deficit for the whole year could touch $175 billion or 9.3 per cent of gross domestic product, with exports touching $304 billion and imports at $479 billion.
Khullar said imports were rising mainly on account of demand for some items crucial for the economy, such as coal, fertiliser and vegetable oil. “You are paying higher prices for these things. These are essentially demand constraints compelling us to import these goods," he said. The increasing import bill and widening trade deficit would, he said, put pressure on the rupee. It crossed the 50-mark (to the dollar) recently.
According to the Federation of Indian Export Organisations (FIEO), the government should extend interest subvention for all export sectors in the coming year’s budget. FIEO president M Rafeeque Ahmed said exporters were facing difficulties even in the relatively newer markets of Latin America, due to several non-tariff barriers there. He said 2013-2014 would also turn out to be difficult for Indian exports.
Export of some items that registered growth during April-February were engineering, petroleum, gems and jewellery, and readymade garments. These, respectively, totalled $54.5 billion, $53 billion, $40.6 billion and $12.1 billion, respectively.
During the same period, import of petroleum products, gold and silver, machinery and electronics reached $132.6 billion, $54.5 billion, $32.2 billion and $30.1 billion, respectively.