Millennium Post

Exports drop 3.67% in Feb after rising for 7 months

The trade deficit in February, as per data released by the government on Tuesday, narrowed to  $8.13 billion, the lowest level in five months. It improved mainly on account of decline in gold and silver imports in February.

Total imports fell 17.09 per cent to  $33.81 billion last month. Oil imports, too, declined 3.1 per cent to  $13.6 billion.

Apex exporters body FIEO said that due to the decline in overseas shipments, India's exports will fall short of target by about  $15 to 18 billion. The government has estimated exports at  $325 billion in this financial year.

‘Credit is the biggest problem which exporters are facing. Arrears of duty refund claims have crossed Rs 20,000 crore. Global demand is there but we are unable to take advantage of this due to credit problem,’ Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed said.

After registering a 13.47 per cent growth in October, exports recorded growth in single digits until January.

Sectors contributing significantly to the export basket such as petroleum, engineering and pharmaceuticals registered a decline in February. For the April-February period, exports were up 4.79 per cent to  $282.7 billion.

Imports during the 11-month period fell 8.65 per cent to  $410.86 billion. The trade deficit during this period was  $128 billion. Non-oil imports in February declined 24.5 per cent to  $20.12 billion.

During April-February, non-oil imports dipped 13.4 per cent to  $259.02 billion. However, oil imports during the period rose 0.8 per cent to  $150.63 billion.

Imports of cotton (raw and waste), vegetable oil, textile yarn fabric, fertiliser, precious and semi-precious stones, iron and steel, machine tools and electronic goods fell in February.

Iron and steel and electronic goods imports contracted 26.7 per cent and 14.4 per cent to  $582.93 million and  $2.11 billion, respectively, in February.

Exports of petroleum, engineering and pharmaceuticals dipped 10.36 per cent, 2.76 per cent and 1.62 per cent to  $4.91 billion,  $5.02 billion and  $1.17 billion, respectively. Gems and jewellery exports dipped 4.18 per cent to  $3.59 billion in February.

There was an increase in exports of marine products (63.3 per cent), iron ore (31.92 per cent), man-made yarn (19.57 per cent) and ready-made garments (15.54 per cent) last month.

February Gold, silver imports silde 71.4% to $1.63 billion

New Delhi:
Gold and silver imports declined 71.4 per cent to $1.63 billion in February mainly due to restrictions imposed by the government on inbound shipments of the yellow metal to narrow the current account deficit. Imports of gold and silver in February 2013 stood at $5.24 billion. In January this year, they were $1.72 billion. Imports of the precious metals during April-February declined 41.47 per cent to $30.7 billion from $52.4 billion a year earlier. India’s current account deficit (CAD), which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 per cent of GDP in 2012-13, mainly due to rising imports of petroleum products and gold. A high CAD puts pressure on the rupee, which in turn makes imports expensive and fuels inflation.

According to a finance ministry official, the CAD is expected to fall by almost 50 per cent to $45 billion in the current financial year.  The Reserve Bank had last month projected CAD at less than $50 billion, or 2.5 per cent of GDP, down from $88.2 billion, or 4.8 per cent of GDP, in 2012-13. The government had increased customs duty on gold to 10 per cent and banned import of gold coins and medallions, while the RBI linked imports of the metal to exports.
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