Exports meet target, rise by 11.58 pc

Exports meet target, rise by 11.58 pc
AGENCIES & EEB

NEW DELHI, MAY 1: India's exports have gone up to a record $ 37.53 billion in 1999-2000 achieving a growth of 11.58 per cent, a little over the targetted 11.5 per cent. However, imports grew at a slower pace of 10.19 per cent to $ 46.15 billion during the year.

As a result, the trade deficit rose to $8.62 billion from $8.25 billion in 1998/99. There was a 64.26 per cent rise in oil imports at $ 9.66 billion as against $ 5.88 billion in the previous year. However, non-oil imports showed a marginal rise to $ 36.50 billion from $ 36.01 billion.

Monthly trade data released here today put the exports for the last financial year at $ 37.537 billion which was 11.58 per cent higher over $ 33.64 billion in the previous year. In rupee terms, the growth was put at 14.93 per cent in 1999-2000 as compared to the previous year.

India's imports was estimated at $ 46.153 billion which was 10.19 per cent higher than the level of $ 41.886 billion in 1998-99. The trade deficit during April 1999 to March 2000 was estimated at $ 8.6 billion which was higher than the deficit of $ 8.2 billion during the same period in the previous year.

Said Navratan Samdria, president of Federation of Indian Export Organisations, "The growth rate could have done better in the year gone by -- at least, 20 per cent. Poor infrastructure facilities, high transaction costs and high cost of bank credit have pulled down the growth. In the current year (2000/01), we don't expect the economy's exports to be more than 10 per cent."

According to Saumitra Chaudhari, economist, ICRA Ltd, "You have an export growth of 11.6 per cent which is essentially a continuation of the recovery in export growth beginning September, 1999. As far as import growth is concerned, almost the entire import growth has come from the higher oil import bill as a result of increase in oil prices. The oil import bill went up by 64 percent while the non-oil import bill increased by only 1.3 percent. This has allowed the trade deficit to be contained at almost the same level as last year."

"The oil prices have to an extent reversed, but we are unlikely to reduce the oil import bill (in 2000/01) because the prices now are almost equal to the average prices in 1999/2000. There is a likelihood of non-oil imports going up because of import deregulation and industrial recovery," said DH Pai Panandikar, economist, RPG group

"Taking out the effect of oil prices, trade has improved a lot. Exports have grown sharply: 11.6 per cent annual growth is a good growth. The trade balance has remained same; but higher invisible earnings -- contributed mainly by software exports -- will help lower current account deficit," MR Madhavan, analyst, ICICI Securities.

Exim policy lost relevance

NEW DELHI: The Export-Import (Exim) policy has lost its relevance with the phased dismantling of quantitative restrictions (QRs) by April one, next year, warns Indian Institute of Foreign Trade (IIFT) dean Prof B B Bhattacharya.

The commerce ministry will ``become toothless'' with the Exim policy losing its importance, he said, adding only tariff mechanism was available, which is the domain of the finance ministry. The abolition of special import licence (SIL) from this year is also not encouraging to exporters, as the premium they used to get on SIL was no longer available, he said.

However, the Export Promotion Credit Guarantee (EPCG) scheme proposed this year is favourable as the threshold limit has been removed for all sectors, he said. Referring to the surging inflation in recent weeks, he said it was important that the inflation was kept low and foreign exchange not allowed to appreciate to give a boost to exports. Coupled with this, there was a need to remove infrastructural bottlenecks, he said.