NEW DELHI: India Inc today said the shrinking trade gap will help contain current account deficit and stabilise the currency, while it expressed concern over export growth losing momentum in January.
"It is good to see that trade deficit has contracted... 48 per cent reduction in trade deficit in January implies 28 per cent decline in our cumulative merchandise trade gap for the first 11 months of this fiscal. This will significantly help in containing CAD within sustainable level near 2.5 per cent of GDP," Ficci President Sidharth Birla said.
"Although exports continued to grow in January, sluggish growth since November last year reflects a somewhat weak recovery in global demand," he said.
India's exports increased 3.79 per cent to $26.75 billion in January, helping the trade deficit to narrow to $9.92 billion. Imports declined 18.07 per cent to $36.67 billion in January.
Trade gap stood at $18.9 billion in January 2013. Assocham President Rana Kapoor said: "The January trade numbers do not reflect signs of an economy which is on the rebound. The stable macro picture is mostly a result of a sharp import compression that again is a result of economic slowdown, widely felt across different sectors".
"The positive effect of narrow trade deficit will show on the current account deficit (CAD) and also be felt on the value of the Rupee," Kapoor said.
Chairman of CII National Committee on Exports Sanjay Budhia said: "Exports seem to have lost momentum as they were growing at a double-digit rate until October".
"We hope the government will help exporters by including more products and countries in the Focus Product Scheme and Focus market Scheme. We also need to relook at the
SEZ policy and duty drawback rates," he said.
For the April-January period, exports were up 5.71 per cent to $257.09 billion.
"It is the engineering sector which has led the rebound in India's overall exports with an impressive rise of 37 per cent in January. The sector is set to emerge as the largest contributor to the country's total exports basket," EEPC India Chairman Anupam Shah said.
Terming the dip in trade deficit as "inspiring", PHD Chamber of Commerce President Sharad Jaipuria said the industry body expects export/import ratio to improve in the coming months and the Rupee to remain stable around 62/USD.
"Trade facilitation activities such as ports, cargo and easy regulatory clearances should be improved to enhance India's exports growth," he said.
Gold and silver imports declined 77 per cent to $1.72 billion against $7.49 billion in the same month last year.
Source : economictimes.indiatimes.com