New Delhi: Remarkable growth of over 36% in merchandise exports in December 2010, is expected to improve India’s current account scenario that represents net outflow of income from the country, barring capital movement.
Against the export target of $200 billion, the country’s outward shipments are projected between $215-225 billion in the current fiscal, according to commerce secretary Rahul Khullar.
“Exports for December 2010 are $22.5 billion, imports are $25.1 billion. Trade deficit is only $2.6 billion, the lowest trade deficit in the last 3 years and that is very good news in terms of keeping our CAD in check,” Khullar said.
The December exports growth was 33-month high, while imports contracted by 11.1%.
With April-December 2010-11 exports growing by 29.5% and imports by 19%, the total trade deficit is expected to be $120 billion against the earlier estimates of $135 billion.
“You save $15 billion in your (import) bill..That’s big money”, the commerce secretary said.
As a result of a “remarkable job” by exports, the country’s current account gap, of which trade balance is a major component, is likely to be lower than 3.5%, “which people, including economists from the International Monetary Fund were forecasting”.
Some of the economists were even apprehensive of the current account gap being at 3.7% of the gross domestic product (GDP).
India’s current account deficit, representing net flow of income out of the country barring capital movements, surged 72% to $15.8 billion in the July-September quarter over the same period last year.
The current account deficit, which includes deficit in external trade of goods, services, besides net investment income, stood at 2.9% of GDP last fiscal.