Wednesday, April 20, 2011

Exports rise 37.5% to a record high of $246bn

NEW DELHI: India's exports rose 37.5% in 2010-11 to touch a record $246 billion as traders targeted new markets and gained from improved sentiments in the US and Europe. Provisional numbers released by the commerce department on Tuesday showed that engineering goods and petroleum helped exporters close the year with nearly 25% higher exports than the $200 billion targeted by the government (see table). 

But oil appeared to be the main culprit when it came to imports, which rose 21.5% to $350.3 billion during the last financial year. Oil imports crossed the $100 billion mark to close the year at $101.7 billion, with the possibility of upward revision. Higher-than-budgeted exports, however, helped the economy deal with a lower than estimated trade deficit of $104.4 billion, which may be revised to $105-110 billion. At the present level, it was lower than $109 billion in 2009-10. 

With trade adding up to nearly $600 billion in 2010-11, it now accounts for nearly 50% of India'sgross domestic product (GDP). While there was all-round cheer and expectation of reaching the $450 billion export target ahead of the 2014 deadline, the government warned that a steep rise during the current financial year might be a tough task. To begin with, commerce and industry minister Anand Sharma warned of the possible adverse impact of higher global oil prices, which would push up production costs. 

Commerce secretary Rahul Khullar added growth worries in the US and Europe and problems in Japan to the list. "At the moment, 2011 is not looking very good," he said while adding that the government would try to push for a 25% growth in the current financial year too. In March, exports went up by 43.9% to $29.1 billion, while imports rose 17.3% to 34.7 billion, resulting in a trade deficit of $5.6 billion.

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