The real interesting story here is the huge surge in imports because I have never seen numbers this large. Dr Rahul Khullar New Delhi, May 19

Exports in 2010-11 have kicked off on a positive note with shipments in April the first month of this fiscal posting a 36.2 per cent year-on-year growth to touch $16.9 billion.

However, the robust growth comes over a low base. Last April, exports had fallen by 30 per cent to $12.4 billion due to the financial crisis.

It is not surprising that the Government did not express any great enthusiasm about the export growth in April.

Don’t get carried away by these numbers. You have an increase in percentage terms (in April) because of the low base (of April 2009), the Commerce Secretary, Dr Rahul Khullar, told reporters here on Wednesday.

Dr Khullar expressed concern over the Euro zone debt crisis and the US’ slow economic recovery. The US and the European Union are traditional markets for Indian exports with the EU accounting for a fifth of total exports, while shipments to the US comprise 12 per cent.

Meanwhile, indicating strong industrial recovery and increasing domestic growth, imports in April recorded a huge 43.3 per cent increase to $27.3 billion from $19.1 billion in April 2009. Oil imports rose to $8.1 billion from $4.7 billion in April last year, while gems and jewellery imports rose 118 per cent, chemicals (47 per cent) and iron and steel (141 per cent).

Revival signal The real interesting story here is the huge surge in imports because I have never seen numbers this large. Over $8 billion jump in a month, Dr Khullar said.

Mr A Sakthivel, President, Federation of Indian Export Organisations, said the import growth is an indication of revival of manufacturing sector which in turn will facilitate exports. Industrial production is registering double digit growth and the growth in March was 13.5 per cent. Industrial growth for 2009-10 was 10.4 per cent.

On the future outlook regarding exports, the Commerce Secretary said, Given the current global uncertainties, I won’t say things are fine on the export front. The situation in EU is certainly not normal. Recovery in US is still far from gung-ho. Therefore, to expect that exports (for 2010-11) will grow at 25-30 per cent is a pipedream. But when you get some degree of greater assurance, that is when jobs are back in the US and the employment situation starts picking up in Europe, then all of us will be able to breathe much easier than we are today.

Exports from sectors like textile (30 per cent growth), engineering goods (up 16 per cent), marine, petroleum products (80 per cent growth), gems and jewellery (36 per cent increase) posted a rise while food grains and handicrafts are faring poorly. Trade deficit for April increased to $10.4 billion from $6.7 billion in the same month last year.

The Government has set an export target of $200 billion for 2010-11, a 13 per cent growth over $176.5 billion in 2009-10.

Mr Sakthivel said, We need to regularly review our strategy in view of the set back in Euro zone. We hope the crisis won’t spread.

Mr Aman Chadha, Chairman, Engineering Exports Promotion Council, said, The weak sentiment in Euro zone is impacting our business. But certain markets like Germany and Italy are better, especially for segments like auto and auto parts. However, it is difficult to predict the future outlook.

India’s exports had contracted for 13 consecutive months starting October 2008. It turned positive in November 2009.

Dr Khullar said the Commerce Ministry is doing a stock-taking exercise in consultation with the industry to understand which sectors need to be incentivised in the forthcoming Foreign Trade Policy supplement to boost exports.

Mr Sakthivel demanded concessional credit to exporters as the interest rate in India is higher than what is prevailing in competing countries.

Article’s Source is http://www.thehindubusinessline.com/