New Delhi: India’s exports grew 44% in August but a sharp slowdown in growth trends in a turbulent global economic climate should prompt the government to support exporters with stimulus measures, trade secretary Rahul Khullar said on Friday.
Indian exporters enjoyed record growth in the last fiscal year and have notched high double digit growth in recent months, buoyed by demand for the country’s cars, petroleum products and precious stones. July’s reading was more than 80% growth.
However, economic turbulence in the United States (US) and Europe, India’s top sales destinations, means growth will likely slow down further in September and October, he said, likely bulging the trade deficit for the fiscal year ending March 2012.
Import growth has surged in recent months as India, one of the world’s fastest growing major economies, imports anything from oil to transport equipment to industrial machinery, despite recent industrial data pointing to a slowdown.
“I don’t know when, something will have to be done,” Khullar told reporters, when asked whether the government would provide stimulus measures for exporters. “Up till now we have had a good run, but you could be looking at difficulties down the road. If you want to prevent them, then you better kick in now with action.”
India’s August exports rose 44.2% to $24.3 billion, while imports for the month rose 41.8% to $38.4 billion, leaving a trade deficit of $14.1 billion, Khullar said.
The trade deficit has shown a widening trend over the last three months. It widened to $14.1 billion in August from $11.1 billion in July, and $7.7 billion in June.
Khullar warned that trade deficit for the current fiscal that ends in March could top $130 billion. The trade deficit for fiscal year 2010-11 stood at $104.8 billion.