Highlights
* Garments, gems and jewellery exports shrink, hits growth
* Gold, jewellery imports plummet as demand slows
* Trade sec says "lucky" if 2012/13 exports grow 10-15 pct y/y
* Trade deficit may be slightly lower in 2012/13 - Trade sec (Adds quotes, details)
India's exports picked up in April after falling in March but only grew 3.2 percent from a year earlier and garment, gems and jewellery shipments shrank, highlighting the challenge facing Asia's third-biggest economy in the face of weak global demand.
India's foreign trade has slowed sharply from levels a year ago when exports jumped nearly 32 percent in April from a year earlier, and the country's trade secretary said on Thursday that the country would be "lucky" to achieve 10-15 percent export growth this fiscal year.
Imports were also surprisingly weak in April, rising just 3.8 percent from a year earlier, according to provisional data released on Thursday, reflecting weakening domestic demand and cooling after a 24.3 percent jump in March.
"We will be lucky if we can achieve 10-15 percent growth in exports this year," Rahul Khullar told a press conference. Exports rose 21 percent in 2011/12.
In March, exports fell for the first time in four months, dropping 5.7 percent year-on-year.
Besides a slowdown in exports, the economy is seeing a decline in capital inflows, which is putting pressure on the central bank to support the rupee - which has lost nearly 8 percent against the dollar since March.
On Thursday the Reserve Bank of India took further measures to prop up the battered currency, requiring exporters to sell half the foreign currency in their accounts.
Khullar said a falling rupee would affect imports in the next two to three months.
Analysts said amid a policy gridlock and global economic uncertainty, the central bank would find it tough to support the rupee.
GOLD IMPORTS PLUNGE
The country's trade deficit was $13.4 billion in April, Khullar said, as exports totalled $24.5 billion and imports amounted to $37.9 billion. The deficit was down slightly from $13.9 billion in March.
"It (the RBI) is battling a combination of an unsustainably large current account deficit of around 4 percent of GDP, weak/inadequate capital inflows and a government that is doing less of what it should do and more of what it should not do," said Rajeev Malik, a senior economist at CLSA in Singapore.
India's garment exports fell 20.4 percent in April from a year earlier, while gems and jewellery exports slumped 25.7 percent.
Imports of gold and silver declined by nearly a third to $3.1 billion in April, from $4.7 billion a year ago, as higher gold prices and an increase in import duties crimped local demand.
Oil imports grew 7 percent in April to $13.9 billion, while coal imports grew 5.5 percent to $1.5 billion from a year ago, Khullar said.
The trade deficit could narrow slightly in the current fiscal year which ends in March, from nearly $185 billion in 2011/12, assuming gold imports decline by at least 20 percent this year and there are no oil price shocks, Khullar said.
* Garments, gems and jewellery exports shrink, hits growth
* Gold, jewellery imports plummet as demand slows
* Trade sec says "lucky" if 2012/13 exports grow 10-15 pct y/y
* Trade deficit may be slightly lower in 2012/13 - Trade sec (Adds quotes, details)
India's exports picked up in April after falling in March but only grew 3.2 percent from a year earlier and garment, gems and jewellery shipments shrank, highlighting the challenge facing Asia's third-biggest economy in the face of weak global demand.
India's foreign trade has slowed sharply from levels a year ago when exports jumped nearly 32 percent in April from a year earlier, and the country's trade secretary said on Thursday that the country would be "lucky" to achieve 10-15 percent export growth this fiscal year.
Imports were also surprisingly weak in April, rising just 3.8 percent from a year earlier, according to provisional data released on Thursday, reflecting weakening domestic demand and cooling after a 24.3 percent jump in March.
"We will be lucky if we can achieve 10-15 percent growth in exports this year," Rahul Khullar told a press conference. Exports rose 21 percent in 2011/12.
In March, exports fell for the first time in four months, dropping 5.7 percent year-on-year.
Besides a slowdown in exports, the economy is seeing a decline in capital inflows, which is putting pressure on the central bank to support the rupee - which has lost nearly 8 percent against the dollar since March.
On Thursday the Reserve Bank of India took further measures to prop up the battered currency, requiring exporters to sell half the foreign currency in their accounts.
Khullar said a falling rupee would affect imports in the next two to three months.
Analysts said amid a policy gridlock and global economic uncertainty, the central bank would find it tough to support the rupee.
GOLD IMPORTS PLUNGE
The country's trade deficit was $13.4 billion in April, Khullar said, as exports totalled $24.5 billion and imports amounted to $37.9 billion. The deficit was down slightly from $13.9 billion in March.
"It (the RBI) is battling a combination of an unsustainably large current account deficit of around 4 percent of GDP, weak/inadequate capital inflows and a government that is doing less of what it should do and more of what it should not do," said Rajeev Malik, a senior economist at CLSA in Singapore.
India's garment exports fell 20.4 percent in April from a year earlier, while gems and jewellery exports slumped 25.7 percent.
Imports of gold and silver declined by nearly a third to $3.1 billion in April, from $4.7 billion a year ago, as higher gold prices and an increase in import duties crimped local demand.
Oil imports grew 7 percent in April to $13.9 billion, while coal imports grew 5.5 percent to $1.5 billion from a year ago, Khullar said.
The trade deficit could narrow slightly in the current fiscal year which ends in March, from nearly $185 billion in 2011/12, assuming gold imports decline by at least 20 percent this year and there are no oil price shocks, Khullar said.
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