April exports up 36% but pessimism persists

Indias April exports rose by 36 per cent over April 2009,as demand picked up in gems and jewellery,oil and textiles...

Indias April exports rose by 36 per cent over April 2009,as demand picked up in gems and jewellery,oil and textiles,however Commerce Secretary Rahul Khullar remained tempered in his enthusiasm as April 2009 was the lowest month for exports. Over the last three years,exports in April have fluctuated from $18.5 billion in 2008 to $12.4 2009 before reaching 16.1 this year.

Imports in April rose an annual 43 percent to $27.3 billion buoyed by industrial recovery,stronger domestic growth and rising oil prices,Khullar told reporters. Dont get carried away by the 36.2 percent growth, he said. Yes,things are much better than last year,but that huge bump in growth really is more a pure base effect. Global trade flows are expected to rebound by nearly a tenth in 2010 in line with economic recovery.

Indian exports have shown strong growth in the past six months after 13 straight months of decline. Some sectors such as handicrafts continue to lag and the federal government has provided aid to struggling exporters. Sectoral reviews being conducted by Director General Foreign Trade RS Gujral will result in redistribution of government subsidies in the coming months.

Following Aprils performance,Indias trade deficit touched $10.4 billion,greater than last years $6.7 billion deficit in favor of imports over exports. So long as we stick around $10 billion per year,we wont be in bad shape, Khullar said.

With the deficit on the rise and export growth only relative to last years poor performance,Khullar insisted that the real story in Aprils preliminary data was the performance of Indian imports which reached $27.3 billion in April over $19.1 billion last year. Oil imports were up by 70 per cent,growing to $8.1 billion from $4.7 billion. Gems and jewellery grew by 118 per cent up to $2 billion while chemicals bumped up 47 per cent,up to $1.3 billion. This arent small figures,were talking about billions here, Khullar said.

The commerce secretary said the April exports number does not take into account the possible impact of Greeces debt woes on trade. The European Union is Indias largest trading partner and accounts for around 20-25 percent of India’s exports. You do not know how Greece will pan out, he said. If the contagion spreads,God forbid,then what do you do? I hope for the best,but I have to be ready for the worst, he added.