Exports grew by 22.5 per cent in August to USD 16.64 billion year-on-year on improved global demand for Indian merchandise, raising hopes that the USD 200 billion target for the fiscal will be easily achieved.
Imports, however jumped by a higher rate of 32.2 per cent to USD 29.7 billion in August, resulting in a trade deficit of USD 13.06 billion, which is a cause for worry.
During April-August this fiscal, exports grew by 28.6 per cent to USD 85.27 billion vis-a-vis the same period last year. Shipments had grown by 13.2 per cent in July.
Expressing satisfaction about the healthy growth in exports in the past few months, the Federation of Indian Export Organisations (FIEO), the apex body of exporters, said the country could even surpass the USD 200 billion target set by the Commerce Ministry for 2010-11.
"We expect that the growth will be positive in the coming months as well and we will achieve USD 200 billion target during 2010-11," FIEO President A Sakthivel said.
Exports in 2009-10 stood at USD 178 billion, he added.
However, Commerce Secretary Rahul Khullar had recently said the rate of "heady growth" witnessed in the first quarter of the year has clearly decelerated.
Khullar had said that while there is a marked improvement in exports during 2010-11 over the previous year, "you are well below the USD 17.8 billion which was achieved in August, 2009."
Crisil Principal Economist D K Joshi said: "Exports growth will be positive, but it will not be very strong. I think the trade balance gap will be under pressure."
While exports are expanding, the rise in imports on the back of 8.8 per cent economic growth in the first quarter of this fiscal and the widening gap between exports and imports (trade deficit) remain the main areas of concern for the government.
During the April-August period, the trade deficit amounted to USD 56.62 billion, translating into an average deficit of USD 11.2 billion every month.
The Commerce Ministry expects that the trade gap in the ongoing financial year will amount to USD 135 billion.
The sectors registering healthy exports growth include cotton yarn, gems and jewellery, iron ore, engineering and petroleum, oil and lubricants (POL). However, the readymade garments, handicrafts, handlooms and carpets sectors are still in bad shape.
Oil imports and non-oil imports during the month under review grew by 12.4 per cent to USD 7.79 billion and 41.1 per cent to USD 21.88 billion, respectively.
During April-August, 2010-11, oil imports and non-oil imports grew by 31.7 per cent to USD 40.73 billion and 33.7 per cent to USD 101.15 billion, respectively.
Imports during the period grew by 33.1 per cent to USD 141.89 billion.