Financial Daily from THE HINDU group of publications
Tuesday, Jan 17, 2006
Industry & Economy - Exports & Imports
Exports in December up 16 pc; April-Dec trade deficit widens
New Delhi , Jan. 16
AFTER suffering a decline in November 2005 following a scorching pace of growth in the previous months, the country's exports regained momentum in December 2005 by logging a growth of 16.19 per cent in dollar terms to take the cumulative export growth during the first three quarters of the current fiscal to $66.4 billion.
In a statement issued by the Department of Commerce to announce the trade data for the first three quarters, the Union Commerce Minister, Mr Kamal Nath, said that "I am bullish on exports," while commenting on the pick-up in exports during December 2005.
Goaded by the sound performance of exports, the Commerce Minister is organising a meeting of exporters with the Prime Minister, Dr Manmohan Singh, early next week to map out strategies and sort out the problems plaguing the exporters in particular, sources in the Government told Business Line here.
It might be noted that buoyed up by the sustained boom in exports during the first seven months, it was only towards the end of November 2005 that Mr Nath exuded optimism that exports for the current fiscal might touch $100 billion, even as the official target set in July 2005 was only $92 billion. Subsequently, the November 2005 export figure released in December 2005 poured cold water on the optimism as exports nose-dived for the first time in November 2005 in the current fiscal.
Exports during 2005 now are valued at $8,283.70 million, which is 16.19 per cent higher than the level of $7,129.23 million during December 2004, while the cumulative export figure for the period April-December 2005 are valued at $66,431.00 million, which is 18.03 per cent higher than the level of $56,284.61 million during April-December 2004.
Officials in the Commerce Ministry contend that the bounce back in export was presumably due to the pick-up in gem and jewellery exports, which suffered a jolt in the previous month, while other traditional export items such as engineering goods and to a certain extent textile goods had been doing reasonably well.
The country's import growth was somewhat moderated in December 2005 as it registered a modest 8.44 per cent growth at $10,985.94 million over the level of imports valued at $10,130.59 million in December 2004.
However, cumulative import growth continues to be on a higher gear as imports during the first three quarters registered a hefty 27.29 per cent growth at $96,263.95 million over the level of imports valued at $75,627.19 million in April-December 2004.
Oil imports during the period under review are valued at $31,123.72 million, which is 45.43 per cent higher than oil imports valued at $21,401.08 million in the corresponding period of the last fiscal, owing primarily to the sustained high price of imported crude throughout the current fiscal than to any unprecedented uptrend in energy consumption at home.
Non-oil imports during April-December 2005 are valued at $65,140.23 million, which is 20.13 per cent higher than the level of such imports valued at $54,226.11 million in April-December 2004-05.
The higher growth in non-oil imports reflect in the salutary industrial growth the country recorded as most of the non-oil imports pertain to import of machinery and other industrial intermediates that also go into export production.
As a result of high export and import growth, the country's overall trade balance turned sharply up at $29,832.95 million during April-December 2005, which is far higher than the deficit of $19,342.58 million during April-December 2004. As the trade deficit during the first three quarters is running close to a whopping $30 billion, its effect on the current account balance has emerged as a source for discomfort even as the receipts from invisibles and remittances in the current account remains on a high growth path.
In rupee terms, the cumulative exports during the first three quarters of the current fiscal amounted to Rs 2,93,829.21 crore, which is 15.18 per cent higher than the value of exports during the corresponding periods of the previous fiscal.
In contrast, import growth in rupee terms rose by 24.18 per cent during the period under review at Rs 4,25,666 crore.
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