Exports grow marginally; trade gap at 18-month high

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SME Times News Bureau | 15 Oct, 2014
Country's exports grew marginally by 2.73 percent in September, but a surge in gold imports pushed the trade deficit to about 18-months high of USD 14.2 billion, said official data released on Tuesday in New Delhi.

According to data, exports during September were valued at USD 28.90 billion, which was 2.73 percent higher than the level of USD 28.13 billion during September, 2013. While imports during September, 2014 were valued at USD 43.15 billion representing a growth of 25.96 percent over the level of imports valued at USD 34.25 billion in September, 2013.

The trade deficit for the month of September stands at USD 14.24 billion which was 132.71 percent higher than the value of USD 6.12 billion in September 2013.

This phenomenal increase in trade deficit is mainly due to rise in imports without adequate rise in exports, said release.

Imports have increased mainly due to unusual growth of 449.7 percent in imports of Gold and 105.6 percent in imports of Metalliferous Ores & Other Minerals over the same period last year.

Both these items have a high value in the import basket with Gold having a value of USD 3.75 billion and Metalliferous Ores & Other Minerals having a value of USD 817.79 million in September 2014.

Cumulative value of exports for the period April-September 2014-15 was USD 163.70 billion as against USD 153.75 billion registering a growth of 6.47 percent over the same period last year. And cumulative value of imports for the period April-September 2014-15 was USD 234.09 billion as against USD 230.47 billion registering a growth of 1.57 percent over the same period last year.

However, the trade deficit for April-September, 2014-15 was estimated at USD 70.39 billion, which was lower than the deficit of USD 76.72 billion during April-September, 2013-14.

Reacting to trade data for the month of September 2014, Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO) said that while decline in exports is disappointing, the same is primarily due to global factors.

WTO has recently only downwardly revised global trade forecast for 2014 to 3.1 percent as against 4.7 percent predicted earlier, a whopping cut of 1.6 percent.

"Moreover, softening of crude prices, which is good for Indian economy, has also contributed to decline in petroleum exports. A sector which normally would have shown around 15 percent has exhibited 13 percent decline which has impacted overall exports growth by 5-6 percent, assuming a share of close to 20 percent," added FIEO Chief.

Uncertainty over continuation of interest subvention and new Foreign Trade Policy should be removed as exporters are in dilemma in doing their costing while contracting for new orders, added Ahmed.