Merchandise exports registered a robust 35.25% growth to $14.23 billion during February 2008, as against $10.52 billion in the same month last year. This is the fastest export growth in the last four months and comes despite a strong rupee, which has risen over 10% against the US dollar in the last 12 months.
India’s export growth in the April-February 2007-08 period is pegged 22.9% higher than the comparable period in the previous fiscal. The modest performance in exports notwithstanding, exports from certain labour intensive sectors like textiles, handicrafts and some leather items are continuing to experience negative growth.
The buoyancy in exports, does not convey the real picture. Commerce ministry data show that the sectors with higher import content like petroleum products, gems and jewellery, engineering goods, pharmaceuticals, chemicals, and agriculture have provided the momentum for growth in exports, which have been hit by the appreciation of the rupee and infrastructure bottlenecks.
The real benefit to the economy is when sectors with less import content like textiles, handicrafts and leather show a higher export growth instead of petroleum products or gems and jewellery where the import content is high.
India’s imports during February 2008 are valued at $18.46 billion, representing an increase of 30.53% over imports valued at $14.14 billion in February 2007. Cumulative value of imports for the period April- February, 2008 was $210.89 billion against $161.95 billion exports in the comparable period of the previous year registering a growth of 30.21%.
Oil imports during February 2008, valued at $6.27 billion was 39.52% higher than oil imports worth $ 4.49 billion in the corresponding period last year. Oil imports during April-February 2008 were valued at $ 66.01 billion which was 26.81% higher than oil imports of $52.05 billion in the corresponding period last year.
Non-oil imports during February, 2008 were estimated at $ 12.19 billion which was 26.35% higher than non-oil imports of $ 9.65 billion in February 2007. Non-oil imports during April-February 2007-08 were valued at $ 144.88 billion which was 31.83% higher than the level of such imports valued at $ 109.902 billion in April-February 2007.
The country’s trade deficit for April-February 2007-08 was estimated at $ 72.46 billion which was higher than the deficit at $ 49.32 billion during April- February 2006-07.
Though the country has witnessed an impressive growth in exports in February 2008, narrowing the trade deficit, it looks a bit uncertain for the country to achieve its export target of $160 billion for FY 2007-08 (with only month remaining). Despite exports recording a surge of 35% in February 2008 to $14.23 billion, pulling the eleven months export figures to $138.4 billion, meeting the export target of $160 billion for FY 2007-08 is a tough call as it would require exports to touch $21 billion in March 2008.
Outlook
India’s monthly merchandise trade deficit narrowed during February. Although import demand remained robust in February, inbound shipments will likely moderate in the coming months as consumption by both households and businesses eases.
Nevertheless, India’s demand for imports will continue to remain firm on support from the country’s heavy dependence on imported energy and machinery and capital equipment to build domestic infrastructure.
India’s export growth in the April-February 2007-08 period is pegged 22.9% higher than the comparable period in the previous fiscal. The modest performance in exports notwithstanding, exports from certain labour intensive sectors like textiles, handicrafts and some leather items are continuing to experience negative growth.
The buoyancy in exports, does not convey the real picture. Commerce ministry data show that the sectors with higher import content like petroleum products, gems and jewellery, engineering goods, pharmaceuticals, chemicals, and agriculture have provided the momentum for growth in exports, which have been hit by the appreciation of the rupee and infrastructure bottlenecks.
The real benefit to the economy is when sectors with less import content like textiles, handicrafts and leather show a higher export growth instead of petroleum products or gems and jewellery where the import content is high.
India’s imports during February 2008 are valued at $18.46 billion, representing an increase of 30.53% over imports valued at $14.14 billion in February 2007. Cumulative value of imports for the period April- February, 2008 was $210.89 billion against $161.95 billion exports in the comparable period of the previous year registering a growth of 30.21%.
Oil imports during February 2008, valued at $6.27 billion was 39.52% higher than oil imports worth $ 4.49 billion in the corresponding period last year. Oil imports during April-February 2008 were valued at $ 66.01 billion which was 26.81% higher than oil imports of $52.05 billion in the corresponding period last year.
Non-oil imports during February, 2008 were estimated at $ 12.19 billion which was 26.35% higher than non-oil imports of $ 9.65 billion in February 2007. Non-oil imports during April-February 2007-08 were valued at $ 144.88 billion which was 31.83% higher than the level of such imports valued at $ 109.902 billion in April-February 2007.
The country’s trade deficit for April-February 2007-08 was estimated at $ 72.46 billion which was higher than the deficit at $ 49.32 billion during April- February 2006-07.
Though the country has witnessed an impressive growth in exports in February 2008, narrowing the trade deficit, it looks a bit uncertain for the country to achieve its export target of $160 billion for FY 2007-08 (with only month remaining). Despite exports recording a surge of 35% in February 2008 to $14.23 billion, pulling the eleven months export figures to $138.4 billion, meeting the export target of $160 billion for FY 2007-08 is a tough call as it would require exports to touch $21 billion in March 2008.
Outlook
India’s monthly merchandise trade deficit narrowed during February. Although import demand remained robust in February, inbound shipments will likely moderate in the coming months as consumption by both households and businesses eases.
Nevertheless, India’s demand for imports will continue to remain firm on support from the country’s heavy dependence on imported energy and machinery and capital equipment to build domestic infrastructure.
