"It is only one product group which has contributed to (slower growth in exports) and that is petroleum products. There has been an unplanned maintenance shutdown in one of our largest exporters of the country - Reliance Industries," Commerce Secretary S R Rao said on Friday. (Agencies)
India's exports stood at USD 26.3 billion in December compared with USD 25.4 billion in the same month of 2012. Petroleum exports, which contribute significantly to the country's trade basket, declined 16 percent last month.
However, a 15.25 percent decline in imports to USD 36.4 billion, particularly in gold and silver shipments, helped to narrow the trade deficit to USD 10.1 billion in December. In November, the trade gap was USD 9.21 billion.
Inward shipments of gold and silver dipped 68.8 percent to USD 1.77 billion from USD 5.6 billion in December last year, although they were higher than USD 1.05 billion in November.
Oil imports grew 1.1 percent to USD 13.89 billion during the month. Rao said that barring petroleum products, all other sectors such as engineering, textiles and chemicals have shown reasonable healthy growth.
Commenting on the figures, Rafeeq Ahmed, President of the Federation of Indian Export Organisations, said efforts are required to keep export growth in double-digits.
During April-December, exports aggregated USD 230.3 billion and imports USD 340.3 billion, while the trade deficit was about USD 110 billion.
"We are not happy with a modest growth of 3.49 percent in exports in December," Ahmed said.
Gold and silver imports in the April-December period declined 30.3 percent to USD 27.3 billion from USD 39.2 billion a year earlier. The government and the Reserve Bank of India had taken steps last year to curb gold imports in a bid to contain the current account deficit.
Oil imports in the nine-month period grew 2.6 percent to USD 124.95 billion, while non-oil imports dipped 11.1 percent to USD 215.42 billion.
Export sectors that registered positive growth in December include engineering (15 percent), readymade garments (17.39 percent), chemicals (8.75 percent), cotton yarn and fabrics (1.42 percent), rice (9.72 percent) and plastics (21 percent).
Director General of Foreign Trade Anup Pujari said petroleum exports contracted 16 percent year-on-year to USD 4.8 billion. Engineering shipments were USD 5.5 billion.
In the second quarter of this financial year, Reliance's total exports of refined products reached USD 11.1 billion and accounted for 67 percent of its aggregate refinery product volumes.
Commerce Secretary Rao expressed confidence that India would achieve the export target of USD 325 billion for the current financial year. "We are well on the track of the exports target," he said.
India Inc uninspired by modest export growth in December
Uninspired by export growth easing to 3.49 percent in December, India Inc has asked the government to consider measures, including widening the scope of incentives, to help the country's outbound shipments expand at double-digit rates.
"Though exports rose 3.49 percent they seem to have lost momentum as they had been growing at a double-digit rate until October," Chairman of CII Export Committee Sanjay Budhia said.
"We hope the government will help exporters by including more products and countries in Focus Product Scheme and Focus market Scheme, where we enjoy an advantage. Also we need to relook at the duty drawback rates," he added.
"Export growth of 3.5 percent, although lower month on month, reflects a turnaround in external sector. However, it would not suffice. We have to keep a check on trade deficit, which is more a function of import compression than a robust export expansion," EEPC India Chairman Anupam Shah said.
"We must not forget that trade deficit has narrowed significantly mainly because of import compression which is also a sign of significant slowdown in consumption-led growth and investment-led economic expansion," Assocham President Rana Kapoor said.
"I hope the growth in exports will be back on track in the last quarter to achieve the target of USD 325 billion for the current fiscal," Ficci President Sidharth Birla said.
"If sustained, the drop in trade deficit can ease pressure on current account deficit (CAD), make the Rupee less volatile and enable the country to more effectively manage risks in our external sector," Birla added.
Commerce Secretary S R Rao said export growth slowed mainly because of a drop in petroleum exports. "While reduction in trade deficit provides some solace, we are not happy with a modest growth of 3.49 percent in exports. All out efforts are required to keep export growth in the double-digit," FIEO President M Rafeeque Ahmed said.
"It is only one product group which has contributed to (slower growth in exports) and that is petroleum products. There has been an unplanned maintenance shutdown in one of our largest exporters of the country - Reliance Industries," Commerce Secretary S R Rao said on Friday.