India's Exports rose by 46.45 per cent to $29.21 billion during June 2011

According to the figures released by the Commerce Ministry on 1 August 2011 India's exports rose by 46.45 per cent to $29.21 billion during June 2011. The increase in export was registered amid concerns that the upward growth could be hit by the troubled economic situation in the U.S. and the European zone in the second-half. In May, exports had grown by 56.9 per cent year-on-year to $25.9 billion.

Owing to the spectacular rise of export in June 2011, exports grew by a hefty 45.7 per cent to $79 billion in the first quarter of the current fiscal 2011-12. Sectors including petroleum products, readymade garments, engineering or pharmaceuticals posted robust expansion.

During the first quarter of this fiscal, the sectors which registered healthy export growth include engineering (94%), petroleum products (60%), gems and jewellery (19%), readymade garments (34%), electronics (69%) and chemicals (52%).

Industry players and the Commerce Ministry however expressed concern about the continued financial crisis in the euro zone and the U.S which are India's traditional markets and together account for about 35 per cent of the country's exports, which stood at $246 billion in 2010-11. Federation of Indian Export Organisations (FIEO) opined that the growth trend would not be as good in the third and fourth quarters and would get restricted to around 35-40 per cent. Concerns were also expressed over high inflation and interest rates.

The withdrawal of Duty Entitlement Pass Book scheme (DEPB) from 1 October is expected to further impact exports. However, it is also being projected that recent hike in interest rates from 11% to 11.25% by SBI would make export finance costlier and Indian goods would become non-competitive in the international market.

Imports grew by 42.46 per cent to $36.8 billion in June but the trade deficit of $7.6 billion was almost half the level of $14.9 billion seen in May 2011.Oil imports increased by 30 per cent to $10.18 billion while non-oil imports increased by 47.8 per cent to $26.6 billion. During the first quarter, oil imports grew by 18.1 per cent to $30.52 billion. Non-oil imports, too, increased by 44.68 per cent to $80 billion from $55.35 billion in April-June, 2010-11.

Inbound shipments during the April-June 2011-12 period rose by 36.2 per cent to $110.6 billion, led by import of $30.5 billion worth of petroleum products. The trade gap during the period stood at $31.6 billion.

Meanwhile, the Prime Minister's Economic Advisory Council (PMEAC), in its report on the state of economy mentioned that the merchandise trade deficit is projected at USD 154 billion, or 7.7% of the GDP, in 2011-12. The trade gap was USD 130.5 billion, or 7.59% of the GDP in 2010-11. The invisibles trade surplus on the other hand stood at USD 86.2 billion, or 5% of the GDP in 2010-11, and is projected at USD 100 billion, or 5%, in 2011-12.