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Encouraging exports

Jan 2, 2001

The growth in India’s exports has continues to remain buoyant. Exports posted a double-digit growth of 20.3% in November 2000 compared to corresponding previous month. The export growth in the current year was mainly fueled by software, leather goods, textiles and engineering items. On the other hand, tea, spices, coffee and tobacco have turned out to be areas of concern.

Remarkably, the trade deficit of the country declined by 7.4% during the period April-November 2000 despite high imports. The imports registered a sharp increase of 14.4% during the period fueled by rise in oil imports. A matter of concern is the up trend in the oil imports bill, which reflected a hefty 82.9% growth in the first eight months of the year thanks to high international oil prices. Oil imports also surged because of the commissioning of the 27 mtpa Reliance Petroleum refinery in the second half of 1999. Non-oil import, which dropped by 3%, is equally worrisome, indicating the declining capital investments in the country.

Performance indicators
($ bn) Nov-99 Nov-00 Change April-
Nov 99
April-
Nov 00
Change
Exports 2.9 3.5 20.3% 23.7 28.6 20.6%
Trade Balance 0.9 1.0 11.9% 6.7 6.2 -7.4%

Nevertheless, growth in exports continues to exceed the target. The Federation of Indian Export Organisation (FIEO) has forecasted a 20% growth in the current year. If exports would grow at the current rate in the remaining four months of the fiscal year 2000-01, then it is likely to exceed the current target of 20%. The overall scenario is buoyant due to improved demand in the international markets.

Exports exceeding the target
Month Exports growth*
1997-98 18.0%
1998-99 12.7%
1999-00 11.6%
Apr-00 30.3%
May-00 30.2%
Jun-00 27.6%
Jul-00 16.5%
Aug-00 17.5%
Sep-00 25.0%
Oct-00 16.8%
Nov-00 20.3%
Dec-00 20.3%
Jan-01 20.3%
Feb-01 20.3%
Mar-01 20.3%
*Growth compared to corresponding previous period

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