New Delhi: Exports grew by an annual 22.5% to $16.64 billion in August on improved global demand for Indian merchandise, giving policy makers confidence about achieving the $200 billion target for the fiscal.
Imports jumped at a higher pace of 32.2% to $29.7 billion in August, leaving a trade deficit of $13.06 billion, which is a cause for worry.
“Things are going so far according to our plan and we should be able to reach over exports target of $200 billion,” commerce secretary Rahul Khullar told reporters here.
Expressing optimism, exporters body FIEO said that with this growth rate, exports would even surpass the $200 billion target and reach $210 billion.
Meanwhile, industry reported a 13.8% growth in July, beating by a wide margin the market estimates of a single digit growth.
However, the rate of “heady growth” witnessed in the first quarter of the year has clearly decelerated, Khullar said.
He said while there is a marked improvement in exports during 2010-11 over the previous year “you are well below the $17.8 billion which was achieved in August 2008-09”.
With imports rising on the back of 8.8% economic growth in the first quarter of the fiscal, ballooning gap between exports and imports (trade deficit) remains the main area of concern for the government.
For the April-August period, the trade deficit aggregated $56.62 billion with a monthly average of $11.2 billion.
The year may end with a trade gap of $135 billion. “The gap will be very very large, even compared to $118 billion, that we had two years ago.”
During April-August this fiscal, exports posted a growth of 28.6% to $85.27 billion on a year-on-year basis. Imports during the period grew by 33.1% to $141.89 billion.
The sectors, which registered a healthy rate of exports growth during the first four months of the current financial include cotton yarn and fabric (41%), gems and jewellery (28%), iron ore (84%), chemicals (23%), engineering (40%) and petroleum, oil and lubricants (POL) (50%).
However, segments like readymade garments, handicrafts, handlooms and carpets are still in a bad shape, he said.
During April-August 2010-11, segments that witnessed a good growth rate include POL, which was up 31.7%, fertilisers (79%), vegetable oil (67%), coal (43%), iron and steel (64%), gold (27.7%) and machinery (20%).