New Delhi: India’s exports grew by 23% to $155.5 billion (Rs6.3 trillion) in the fiscal year ended March, missing the annual target by more than $4 billion, and analysts said shipments would face headwinds in the current year due to a possible global slowdown.
Data released by the government on Thursday showed exports grew a robust 26.6% in March to $16.28 billion, up from February’s $14.24 billion, but it was not enough for India to attain the annual target of $160 billion.
Firm oil prices and robust domestic demand boosted imports by 27% to $235.91 billion in 2007-08, and widened the trade deficit for the fiscal year by 35.5% to $80.4 billion, from $59.32 billion the year before.
“This trend shows that the rupee appreciation has not really affected the export performance and missing the target is a minor blip which one can ignore,” said T.K. Bhaumik, chief economist at Reliance Industries Ltd.
“But 2008-09 would be the most difficult year for India’s exports because of the global slowdown and exports will have to face the challenge of falling global demand.”
Bhaumik said the trade gap could widen to $100 billion in 2008-09 but that should not be a cause for worry as India had comfortable foreign exchange reserves.
Exports account for nearly 15% of India’s gross domestic product.
The World Trade Organization said last week that global trade growth would slow to a six-year low in 2008 although financial market turbulence and slowdown in some developed economies have so far had little effect.
Last year, the Indian government raised tax refund rates and offered interest subsidies on bank loans to ease the pain of exporters hit by a rise of 12% in the value of the local currency against the dollar.
The country’s imports rose 35.24% to $23.17 billion in March while non-oil imports, a key gauge of domestic economic activity, were up 18.7% to $14.5 billion.
Non-oil imports in 2007-08 were up 23.4% to $158.9 billion while oil imports during the fiscal year were up 35.3% at $77 billion from a year ago.
In a bid to reach a $200 billion export target for 2008-09, the central government has announced tax refunds and interest subsidies for many exports would continue for another year, and there would be new incentives to promote exports of vegetables, sports goods, toys and computer hardware.
India also hopes to grab a 5% share of global trade by 2020.