Exports Spring A Surprise In FY’11, Touch $246 Billion.

The country’s exports soared to a record $246 billion in financial year 2010-11, zooming past the year’s target of $200 billion. In fact as late as December 2010, the government expected exports to be just about $ 220 billion.

A sharp 85 per cent jump in engineering exports helped total merchandise exports increase by 37.5 per cent to $245.9 billion during the year. The strategy to expand beyond traditional markets to regions such as Latin America and Africa also seems to have paid off.

In March alone, exports rose 43.9 per cent to $29.1 billion. “This is the highest annual percentage growth...it is very encouraging and satisfying,” commerce and industry minister Anand Sharma said after releasing the trade data.

Imports too surged 21.5 per cent to $350 billion largely due to rising oil prices, thereby widening the trade deficit to $104.4 billion. Imports in March totalled $34.7 billion, up 17.3 per cent year-on-year.

Commerce secretary Rahul Khullar said that a robust growth in exports has lessened the government’s worries on the current account deficit (CAD) front. The CAD is likely to be around $25-35 billion, less than 3 per cent of the GDP. Import figures are likely to be revised upwards.

While engineering goods almost doubled to $60 billion, exports of petroleum and oil products jumped over 50 per cent to $42.5 billion. Gems and jewellery grew 15.4 per cent to $33.5 billion, and drugs and pharmaceuticals 15 per cent to $10.3 billion. Exports of smaller items such as carpets too jumped 60 per cent to cross the $ 1 billion mark.

Khullar said while there has been an improvement in demand in the US and EU, the export growth came from new markets like Latin America.

India will aim for at least 25 per cent export growth in the current fiscal. The government has set a target of doubling the exports in three years to $450 billion, Sharma said adding that the final strategy paper will be uploaded on the department site very soon. When asked if the current growth rate in exports is sustainable, Khullar said that looking at the present economic scenario across the world, it would be a “pipedream”.

Sharma said that India’s market opening trade pacts with countries and blocks such as South Korea, Singapore and ASEAN, and the proposed ones with the European Union and others will further increase the exports.

Apex body of exporters FIEO said that the strategy of diversification of products and markets is yielding results. “We are set to reap dividend in near future. Asia, Latin American countries and Africa are the main contributors to this growth,” FIEO president Ramu S Deora said. The exporters’ body exuded confidence that exports in 2011-12 would cross $300 billion.

Source : expressindia.com