29.5 percent cumulative export growth in India between April-Dec 2010-11By ANI
Friday, February 25, 2011
NEW DELHI - The Economic Survey 2010-11, presented by Finance Minister Pranab Mukherjee in the Parliament today, states that India’s cumulative export growth between April-December 2010-11 stood at 29.5 per cent with cumulative exports reaching US $ 164.7 billion during this period.
The exports continued to rise at the rate of 13.6 per cent in 2008-09.
Current indications are that India will not only achieve the target of US$ 200 billion but surpass it in 2010-11.
During 2010-11 (April-December) import growth was at 19 per cent accompanied by an increase in both, petroleum, oil, and lubricant (POL) and non-POL imports at 17.7 per cent and 19.6 per cent respectively.
Trade deficit (on customs basis) increased by 2.4 per cent to US$ 82 billion in 2010-11 (April-December) from US$ 80.1 billion in the corresponding period of the previous year.
With import growth slowing down from October 2010 and exports picking up in November 2010, it was feared that the high current account deficit due to high merchandise trade deficit is disappearing.
The Survey observes that the direction of India’s trade with USA, which was in first position in 2007-08, has gone down to third position in 2008-09, with the UAE becoming India’s largest trading partner, followed by China.
Export-import ratios show that among its top 15 trading partners, India had bilateral trade surplus with five countries, UAE, USA, Singapore, the UK, and Hong Kong in 2009-10 and the first half of 2010-11. India’s export-import ratio in the case of China is not only low but has been stagnant at around 0.3.
While India ranked 21st in world merchandise exports in 2009 compared to China in the first position, in commercial services exports it ranks 12th compared to China at fifth rank.
Services exports reached 106 billion US dollars in 2008-09 with a moderate growth of 17.3 per cent over the previous year but declined to 95.8 billion US dollars in 2009-10.
The share of software services declined to 45.7 per cent in the first half of 2010-11 from 50.8 per cent in the corresponding period of 2009-10.
Non-software services exports, which had registered a high negative growth of - 41.2 per cent in 2008-09 increased their share to 29.5 per cent with high growth of 56.9 per cent.
According to the Survey, the revival of this sector is a good sign, though it is partially due to the base effect. The falling services trade surplus however is adding to the problems on the current account deficit front, instead of acting as a cushion as was the case earlier.
The Survey states that the Trade policy measures taken by the Government and the RBI in 2009-10 and 2010-11 focused on reviving exports and export-related employment besides mitigating the effect of inflation.
The Government followed a mix of policy measures including fiscal incentives, institutional changes, procedural rationalization, enhanced market access across the world, and diversification of export markets.
Exports of SEZs during the first three quarters of the current year have been Rupees 2,23,132.31 crore.
Out of the total employment of 6,44,073 persons in SEZs, an incremental employment of 5,09,369 persons was generated after February 2006 when the SEZ Act came into force.
Some issues related to SEZs include the deadlines under the Direct Tax Code (DTC), goods and services tax (GST)-related issues, coordination issues, and privatization of Government SEZs, adds the Survey.
The trade growth in emerging and developing economies is expected to be more than that of advanced economies in 2011 and 2012.
The outlook for India’s trade sector has brightened with a growth of 29.5 per cent in 2010-11 (April-December) and a growth of 36.4 per cent in December 2010.
However, this needs to be moderated on account of the recent developments in world trade, though transient in nature at present, like the financial turbulence in the periphery of the euro- zone and the new disturbances in the Middle East resulting in oil prices (Brent) crossing the 100 US dollar mark.
There is also a need to guard against new protectionist measures. Though, many of these are on the decline, those already in place need early winding up.
While the potential for India in trade is great, the challenges are also plenty, says the Economic Survey. (ANI)