Export growth continued to be meager as shipments in December 2011 increased by only 6.7% YoY to USD 25 billion, owing to a weak demand in major markets such as the US and Europe.

However, this performance was slightly better than the November 2011 showing, when the export growth was just 3.9%. Month on month export growth this fiscal had shown a slowdown till November from a high of 82 per cent in July.

According to the data released by the Commerce and Industry Ministry, meanwhile, imports during December 2011 rose 19.8% to USD 37.8 billion, resulting in a trade deficit (gap between exports and imports) to USD 12.8 billion for the month.

Exports during the first three quarters this fiscal (April to December 2011) have reached USD 217.7 billion registering a growth of 25.8%. On the other hand, imports for April to December 2011 jumped 30.4% to USD 350.9 billion.

This high level of imports has left widened the trade deficit during the period to USD 133.3 billion from USD 96.2 billion during April to December 2010.

Mr M Rafeeque Ahmed president of Federation of Indian Export Organisations said that though the 25.8% growth in the first nine months of this fiscal looks impressive, it is much less than the 33.2% growth during the first eight months.

He said that the increasing trade deficit is a deep cause of concern as it is likely to hike the import bills in rupee in turn having an adverse effect on inflation.

The Commerce Secretary, Dr Rahul Khullar had said earlier this month that exports during 2011-12 would touch the target of USD 300 billion, while imports are likely to be worth USD 460 billion taking the trade deficit to (a record high of) USD 160 billion.

The Commerce Ministry had said earlier that the rising trade deficit was worrying as it may have an impact on the Current Account Deficit as well.

(Sourced from BL)