Exports cross $300, but trade deficit shoots up

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SME Times News Bureau | 19 Apr, 2012
India's merchandise exports have increased 21% year-on-year to $303.7 billion in 2011-12, despite weak demand in traditional export markets such as the US and the European Union, but growing trade deficit has taken away the shine from this target-surpassing performance.

Interacting with the media persons here today, Commerce Secretary Rahul Khullar informed that India’s exports for the last fiscal (April 2011 to March 2012) have registered a growth of 21%, at $303.7 billion.

However, imports grew at a sharper pace of 32.1% during the period, reaching $488.6 billion, and resulting in a trade deficit of184.9 billion.

The government had set a target of $150 billion trade deficit.

During the last fiscal, sectors that have done well with regard to exports include, engineering($58.2 billion, growth rate 16.9%), petroleum & oil products ($57.5 billion; growth rate 38.5%), gems and jewellery ($45.9 billion; growth rate13.3%), drugs and pharmaceuticals ($13.1 billion; growth rate 21.9%), leather ($4.2 billion; growth rate 22.5%), electronics ($9 billion; growth rate 9.2%), cotton yarn and fabric made-up ($7.2 billion; growth rate 17.4% )

Apart from this, exports of ready-made garments yarns and fabrics grew 18% to $13.7 billion, man-made yarns and fabrics 18.5% to $5.1 billion, and marine products 31.4% to $3.4 billion.

Petroleum imports were the main component in the import basket, registering 46.9% growth at $155.6 billion. This was $50 billion higher than the previous fiscal. The other major imports were of gold and silver, which rose 44.4% to $61.5 billion. This was $19 billion more than in 2010-11.

Together, petroleum, and gold and silver accounted for a $69-billion increase in imports over 2010-11 levels.

However, imports of gems and jewellery fell by 0.6% to $31 billion.

Huge increase in imports was also seen in imports of coal, from $9.8 billion in 2010-11 to $17.6 billion in 2011-12, accounting for a $7.8-billion increase (80.3% growth). Fertiliser imports grew from $6.8 billion to $11 billion during the period under review, registering an increase of $4.2 billion (59%), while edible oil imports jumped from $6.5 billion to $9.6 billion, an increase of $3.1 billion (47.5%).

These three sectors accounted for an additional $15 billion in the import bill.

Machinery imports, including capital goods, registered 27.7% growth at $35.4 billion, while electronics goods imports were worth $32.7 billion (23.2%).

Commenting on the import figures, Khullar said that the trade deficit, which is the highest ever, is a serious concern. He cautioned that the issue of huge imports have to be dealt with urgently.