Exports rise for second consecutive month

Exports rise for second consecutive month
Comment E-mail Print Share
First Published: Tue, Feb 02 2010. 01 57 AM IST

Illustration by Shyamal Banerjee; Graphic by Ahmed Raza Khan / Mint
Illustration by Shyamal Banerjee; Graphic by Ahmed Raza Khan / Mint
Updated: Tue, Feb 02 2010. 01 57 AM IST
New Delhi: India’s manufacturing in January grew at its fastest pace in almost one-and-a-half years, driven by a sharp rise in new export orders that are supporting a recovery in the industrial sector, a survey showed on Monday.
The HSBC Markit Purchasing Managers’ Index, based on a survey of 500 companies, rose to 57.7 in January, its strongest reading since August 2008 and up from 55.6 in December.
Illustration by Shyamal Banerjee; Graphic by Ahmed Raza Khan / Mint
“Any lingering concern that India’s manufacturing recovery was tailing off should be well and truly put to rest by this strong release,” said Robert Prior-Wandesforde, senior Asian economist at HSBC Holdings Plc in Singapore.
Exports continued to rebound, rising an annual 9.3% in December to $14.6 billion (around Rs67,600 crore today), their second consecutive monthly rise, although the pace of annual growth was slower than the 18.2% registered in November. The export figure, released on Monday, was initially disclosed by the commerce and industry minister on 11 January.
Imports increased by 27.2% in December from a year earlier to $24.75 billion, while the trade deficit shrunk by a little over 28% to $76.24 billion in the nine months between April and December 2009.
Markets were little moved by Monday’s data, with the Bombay Stock Exchange’s benchmark index down marginally 0.01%, given that the figures merely confirmed the increasing momentum of India’s recovery from the global downturn.
On Friday, the central bank raised the cash reserve ratio for banks by a higher-than-ex pected 75 basis points in an effort to soak up excess liquidity, and ramped up its forecast for GDP growth in the current fiscal year through March to 7.5%, from its earlier forecast of 6%.
The HSBC Purchasing Managers’ Index mirrored the positive export performance, with a more than five points jump in the new export orders component, a sign that growth in the manufacturing sector is increasingly fuelled by exports.
Month-on-month growth in December exports may have been slowed by the effect of pre-Christmas bookings wearing off, as well as a rupee that rose by 3.4% against the dollar in the December quarter.
The still-sluggish global demand could also weigh on continued expert momentum.
“Exports are not yet on a firm basis and it will be some time before it stabilizes,” said D.H. Pai Panandiker, head of the RPG Foundation, a private think tank. While oil imports were up 42.8% after crude prices shot up from mid-December, non-oil imports climbed by 22.4% in December indicating robust economic activity picking up steam.
Anurag Joshi and Matthias Williams contributed to this story.
feedback@livemint.com
Comment E-mail Print Share
First Published: Tue, Feb 02 2010. 01 57 AM IST