Millennium Post

Foreign sales at 2-year high, imports drop 6.2% in July

In a rare bright spot in an otherwise struggling economy, exports grew by 11.64 per cent in July, the most in nearly two years, while imports dipped by 6.2 per cent.

The trade deficit was unchanged from $12.2 billion in June, putting pressure on the current account deficit and the fluctuating rupee. While exports soared to $25.83 billion in July, imports declined to $38.1 billion.

Gold and silver imports, which dipped by 34 per cent to $2.9 billion in July from $4.4 billion in the same period last year, helped to maintain the trade deficit at the June level.

Commerce secretary S R Rao expressed hope that recently announced incentives, including a hike in the rate of interest subsidy, would help shipments to grow in the coming months.

'We do hope that these measures would help us in improving our export target performance in the coming months...continuing interest in Africa, Latin America, Asean and Far East regions should be helping us (in increasing exports),' he told reporters here.
He said that the country's exports should be 'slightly' better than the previous fiscal when it touched $300.6 billion. During April-July, exports grew by 1.72 per cent to $98.2 billion. Imports increased by 2.82 per cent to $160.7 billion during the period. The trade deficit during the first four months of this fiscal stood at $62.4 billion.

In May and June, shipments were in negative zone. In September 2011, exports were up by over 35 per cent.
India's economic growth fell to a decade's low of 5 per cent in fiscal 2012-13. The CAD touched a historic high of 4.8 per cent of GDP in 2012-13, mainly on account of import of gold and petroleum products.

The rupee touched an all time low of 61.81 against the dollar last week.  The commerce secretary said the government is aiming at a 10 per cent growth in exports as compared to the previous fiscal year.

'...that (10 per cent growth) is what we should be aiming at...New initiatives should play out in the medium term and we do expect exports should be slightly better,' Rao said.

Oil imports in July declined 8 per cent to $12.7 billion and during April-July, it increased 2.65 per cent to $54.5 billion. Non-oil imports fell 5.26 per cent to $25.39 billion.

However, during the first four months, it grew 2.9 per cent to $106.15 billion.On the fluctuating domestic currency, Rao said, 'Any stable exchange rate helps exports. To have a stable currency is important to boost exports.'

Exporting sectors that performed well in July include textiles, ready-made garments, chemicals and pharmaceuticals.
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