NEW DELHI: India’s trade deficit for April declined marginally to $13.48 billion compared to the March 2012 figures, while the exports grew by 3.2% to $24.45 billion on account of recent depreciation in the rupee despite a slowdown in demand from overseas markets like the US and Europe. The April imports also increased by 3.8% on an annual basis to $37.94 billion, said the data released by the commerce ministry on Friday.
A high trade deficit could worsenIndia’s current account balance and further weaken the rupee, which hit a record low on Thursday, besides leading to implications on employment and additional job creation. “The depreciation of rupee prima facie would help exporters in terms of higher realisation in terms of rupee. Overall, in the long term it would help the exporters,” finance secretary RS Gujral said at the meeting of the Board of Trade.
Oil imports increased 7% to $13.9 billion from the corresponding period last fiscal, while non-oil imports stood at $24.03 billion. Oil imports are the single largest burden on the government’s finances sinceIndiaimports about 80% of its crude needs and key fuels such as diesel, kerosene and LPG are heavily subsidised by the state.
The data is in line with the provisional numbers given by the then commerce secretary Rahul Khullar on May 10. Exports have been under pressure due to weakening demand inIndia’s major exports destinations such as theUSandEurope.
“The impact of global contraction in trade is now being felt byIndiaas well. The situation is more grim now as in the past periods of slowdown, the emerging and developing economies exhibited positive growth helping us to increase our exports through market diversification strategy focusing on Latin America, Africa andAsia. The slowdown in new markets will be more obvious in next few months,” M Rafeeque Ahmed, president, Federation of Indian Export Organisations (FIEO), said.
The growth in exports was led by engineering and pharmaceutical consignments, which grew 14.2% and 33% to $5.2 billion and $1.1 billion, respectively. Chemical exports rose 1.4% to $0.9 billion and electronics by 5.4% to $0.6 billion. However, gems and jewellery shipment fell 25.7% to $2.6 billion.
In 2011-12,India’s overall exports grew 21% and marginally crossed the export target at $ 303.7 billion over the previous fiscal. On the other hand, imports shot up by 32.1 % to $ 488.6 billion in the last fiscal, ending the fiscal with the highest-ever trade deficit of $ 184.9 billion.
Despite the country’s exports showing dismal growth, commerce and industry minister Anand Sharma is hopeful that exports would achieve a 20% growth in the current fiscal so as to reach $500 billion by 2014. “There is an implementable plan of action to take exports to $500 billion by 2014 and doubling the percentage of trade by 2020. We hope to see an annual increase of 20% in exports,” he said after chairing a meeting of the Board of Trade (BoT). Sharma also pitched for differential rate of credit for exporters and industry. “The demand for differential rate of credit has a very strong and justified case and will increase investment. We hope a fine balance will be there so that investment climate and productivity improves,” he said. On the demand of exporters and industry leaders to give 2% interest subsidy, Sharma said slowdown in the manufacturing sector has a social dimension when it comes to job creation and therefore there is a need to lift investment sentiments.
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