Trade deficit in Q1 gallops by $5b as exports go down

Exports recorded a mere 9.29 per cent growth rate during the April-July quarter, marking a decline over the 11.06 per cent increase seen up ...

Exports recorded a mere 9.29 per cent growth rate during the April-July quarter, marking a decline over the 11.06 per cent increase seen up to the first quarter. On the other hand, imports rose by as much as 22.73 per cent pushing up trade deficit to nearly $5 billion, more than twice as much as the figure during the corresponding quarter last fiscal.

Commerce ministry officials have attributed the fall in exports to the continuing appreciation of the rupee vis-a-vis the dollar, the prevailing global slowdown, especially in the United States, and China’s fixed exchange rate.

Exports had registered a sharp 29.16 per cent growth in July 2002 and 18.12 per cent during April-July 2002. So the performance in July 2003 and the April-July quarter of this fiscal with such a high base during the corresponding periods last fiscal does not give any cause for concern, officials opine.

Dr Rajesh Chadha of the National Council of Applied Economic Research, also has opined that the export growth registered during the April-July quarter compared to the high base in the same period last year can be considered a good performance. What is also encouraging is the fall in oil imports and the sharp rise in non-oil imports during the above period. This gives a definite indication of increased economic activity in the industrial sector, he explains.

As per the provisional foreign trade data released by the commerce ministry on Monday, exports in July this year were valued at $4,688.35 million, or 5.75 per cent higher than the level of $4,433.53 million recorded in July last year. Cumulative exports during April-July this fiscal were valued at $17,783.3 million against $16,271.53 million of the year-ago quarter.

The data also shows that imports during April-July this fiscal were valued at $22,719.90 million against $18,512.49 million during the same quarter previous fiscal. Imports in July this year were valued at $5,701.94 million, or 17 per cent higher than those valued at $4,873.60 million in July last year.

Oil imports during the first four months of 2003-04 at $5,899.11 million were only 7.72 per cent higher than those valued at $5,476.51 million during the same period last year. On the other hand, non-oil imports grew by as much as 29.03 per cent from $13,035.98 million to $16,820.79 million during the same period. The trade deficit stood at $4,936.17 million, sharply up from the $2,240.96 million recorded during April-July 2002.