Indian exports fall in January

Indian exports fall in January
REUTERS

MARCH 1: A five-day strike by port workers dented India's export growth in January, but year-on-year growth for the first 10 months of financial 1999/2000 kept a double-digit run intact, the government said on Wednesday.

Official data showed exports in January fell to $2.79 billion, down 2.33 per cent from a year earlier. However, in rupee terms, exports were up a marginal 0.07 per cent.

In April 1999-January 2000, exports grew 11.32 percent to$30.22 billion from the same period of the previous year.

A government official said the five-day strike over wages called by unions representing around 100,000 Port workers in January had affected exports, and noted the trade data was provisional.

"The strike affected exports and all the data has not yet come in...we expect export growth to return to double digits in February," the official said.

Analysts said they expected export growth to remain positive through the next few months.

"After last year's economic downturn, exports have been picking up and the general direction of flows is not seen reversing," said Shubhada Rao, senior economist at the Credit Rating Information Services of India Ltd.

"Though these are low-value products, the important thing is they will sustain, as they are to European and U.S. Destinations ...I see the 11-12 percent growth rate sustaining," Rao said.

The Economic Survey, an annual report card on the economy released on Monday, said India needed to sustain export growth of 12-15 per cent and revive foreign investment inflows to ensure the medium-term viability of the country's balance of payments.

In the 2000/2001 budget, presented to parliament on Tuesday,Finance Minister Yashwant Sinha said he planned to phase out tax exemptions to exports over the next five years.

Analysts said one concern remained the slow pace of growth in non-oil imports, traditionally seen as an indicator of industrial activity in capital-scarce India.

"The low non-oil imports are a cause for concern as it indicates low demand for investment funds and that excess capacities still exist," Rao said.

Non-oil imports in April-January were $30.32 billion, just 0.82 per cent higher than in the same period of the previous fiscal year.

Oil imports in April-January rose by 59.48 per cent to $7.82 billion, reflecting a surge in international prices.

Total imports during the period were $ 38.14 billion, up 9.05 per cent over the first 10 months of 1998/99.

The trade deficit for April-January was estimated at $7.92 billion, only slightly up from $7.83 billion a year earlier.