Industry bodies on Wednesday exuded confidence that India's export target of $325 billion for the current financial year (FY14) would be met even as growth in overseas shipments slowed to a five-month low in November.
Industry bodies on Wednesday exuded confidence that India's export target of $325 billion for the current financial year (FY14) would be met even as growth in overseas shipments slowed to a five-month low in November.
Exports increased 5.86 per cent to $24.6 billion in November, the slowest pace in five months, as shipments of petroleum goods and rough diamonds declined. Imports stood at $33.83 billion last month, the lowest level since March 2011. (Read more)
"Export target for the current fiscal will be achieved easily and November figures may be seen as an aberration...Trade deficit will be within $140 to $150 billion in the current fiscal as against $190 billion recorded in 2012-13, helping to keep CAD (current account deficit) between $50 to $60 billion," Federation of Indian Exporters Organisation president Rafeeque Ahmed said.
Imports last month fell 16.3 per cent as inward shipments of gold and silver dropped sharply, helping to narrow the trade deficit to $9.21 billion, the second-lowest in this financial year. The gap in November 2012 was $17.2 billion.
"The continued rise in exports for the fifth month in a row is noteworthy. The first eight months of this fiscal have witnessed a nearly 23 per cent decline in the cumulative trade deficit, which will considerably ease the pressure on the current account deficit and make the rupee more stable," Ficci president Naina Lal Kidwai said.
In April-November, exports grew 6.27 per cent to $204 billion while imports stood at $304 billion.
"While a significant fall in trade deficit is a good development...it is largely a result of a steep import compression rather than a smart rise in exports," said Anupam Shah, chairman of engineering exporters body EEPC India.
"Falling imports are a welcome sign at this juncture. However, fall in the imports of capital goods owing to less investment activity and rising imports of consumer goods does not augur well," Assocham secretary general D S Rawat said.
"The evolving trend strongly indicates that India's trade balance in 2013-14 would improve. While exports may touch $325 billion, imports are expected to fall to $450 billion.
Gold and silver imports in November dipped by more than 80 per cent from a year earlier to $1.05 billion. Oil imports dropped 1.1 per cent to $12.96 billion.
"Compression of imports is a factor...However, we will be able to meet export target of $325 billion," said Sanjay Budhia, chairman of the CII Committee on Exports and Imports.
"The government should come out with a scheme to expand new products basket, duty drawback rates should be restored. Besides, the government should take a holistic view and make special economic zones viable."
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