Wednesday November 4, 03:40 AM

Source: Indian Express Finance

Sep imports fall 31% even as exports look up

By fe Bureaus
Even as the dip in India s exports narrowed in September compared to the levels seen in previous months, the pace of contraction in imports has remained unchanged as appetite for foreign goods in the country remained weak. The commerce ministry data released on Tuesday showed that imports during September contracted 31.3% and stood at $ 21.4 billion. In the same month, exports from the country contracted at 14%, lowest since December 2008 and stood at $13.6 billion due to enhanced sale of gems and jewellery, engineering goods, petroleum products, readymade garments, drugs, pharmaceuticals and fine chemicals in foreign markets. The commerce ministry expects India s exports during 2009-10 to be in the range of $ 165-175 billion and is in the process of finalising another fiscal package to boost overseas sale of goods produced in the country. While exports in the April to September period dipped 28.5% ($77.85 billion), imports contracted at a faster pace of 32.7% ($124.58 billion). Trade deficit during September contracted nearly 50% and stood at $7.76 billion. Economists expect the pace in imports to pick up in the coming months. Domestic industrial activity is on rise as shown by the IIP data. The impact of this on imports will be seen with a lag, Yashika Singh, head-operations, Economic Analysis Group Dun & Bradstreet told FE. Due to both the easing of the base as well as sequential up-ticks, we expect a rapid improvement in the yearly export data over the next quarter, moving into positive territory by December, said Tushar Poddar, vice-president & chief economist, Goldman Sachs, India, in a report. Imports continued to contract sharply in September it had dipped 32.4% in the previous month as India s oil import bill was lesser than what it was in the year ago period. In the month under consideration, oil imports contracted 33.5% and stood at $ 6.34 billion. In the six months ending September, the value of oil imports was 45% less ($ 34.8 billion) than what was seen in the corresponding period of 2008-09. In addition, India imported lesser amount of capital goods and raw material needed by the industry during September, as shown by the non-oil import figures, which was 30.4% less than what was recorded in the year ago month, and stood at $15.03 billion. Meanwhile, the commerce ministry will soon announce another set of fiscal measures to boost exports. The package will not only help exporters to gain additional competitiveness, but also help them cushion the losses arising out of the 8% appreciation of the rupee against the dollar seen in the past three months. Many of the labour intensive sectors now have reported positive change, that is gems and jewellery, handicrafts and also the leather sector. We need so see what more can be done now to give more support through policy measures to those sectors that have been lagging behind. Giving support to all the sectors across the board has definitely boosted the morale if I may say of the MSMEs, handicrafts and the handloom sectors. Sharma told reporters recently. The booster dose for exporters will be focused at labour intensive sectors like engineering, handicrafts and apparels and the specific will be finalised after commerce minister Anand Sharma and his team in Udyog Bhawan reviews exports from various sectors in this month. The commerce ministry s strategy is to fasten the pace at which the dip in exports is narrowing over the last few months through the additional package. Simultaneously, it wants Indian exporters to take advantage of the fiscal incentives to offer their goods at competitive prices to deal with exporters from cheap manufacturing bases like China, Bangladesh and South East Asia. The ministry expects exports to turn positive by December end.