Export growth bounced back to 35.25 per cent in February 2008, showing resilience against the strengthening rupee, while 11-month data showed soaring of the trade deficit on the back of imports being used to fight inflation. Exports grew at an impressive pace to $14.23 billion in February 2007-08 while the April-February period as a whole registered a growth of 22.9 per cent to $138.42 billion. Imports in February went up by 30.53 per cent to $18.46 billion.The cumulative imports for the April-February period were $210.89 billion, showing a growth of 30.21per cent. The 11-month trade deficit was placed at $72.46 billion against $49.32 billion a year ago, according to official data released today. Against the huge growth in dollars terms, the increase in rupee terms was 21.71 per cent in February. Imports in rupee terms showed a growth of 17.45 per cent in February. Hailing the resilience in export trends, Federation of Indian Export Organisations (FIEO) president Ganesh Kumar Gupta said, “We have to look at the disaggregated figure to see how traditional and employment-generating sectors have exhibited growth.” He said that in the past much of the growth has come in exports of petroleum products, gems and jewellery, and engineering products due to increase in prices of raw crude and raw material. The rising imports and the widening of the trade deficit are being attributed to the government reducing duties in the wake of shortages of many commodities, especially in food.Meanwhile, global rating agency Moody’s said today that with the slowdown in the US economy and rupee appreciation, Indian exporters are expected to face tough times in 2008. “Indian exporters will have a tougher year in 2008. While export growth is expected to continue to expand at a solid pace, decelerating global demand, particularly from the US, India’s largest export market, will temper outbound shipments this year,” said Moody’s Economy.com, a subsidiary of the credit rating agency. The rupee surged 12 per cent against the dollar in 2007, but has weakened against most of the major currencies since the start of the year, said Moody’s Economy.com Asia Pacific economics director Ruth Stroppiana in a report Economic Indicators: India Foreign Trade. “We expect the Indian rupee to continue to strengthen vis-a-vis most major currencies in the medium term, particularly against dollar,” Stroppiana said.
