India's Foreign Trade report : Feb 2013
Merchandise exports for the month of Feb 2013 finally showed an upward trend in both dollar and rupee terms. After a long time, we are seeing a turnaround, where the exports are growing. The PIB report, released today, says this:
"Exports during February, 2013 were valued at US $ 26259.36 million (Rs. 141206.31 crore) which was 4.23 per cent higher in Dollar terms (13.99 per cent higher in Rupee terms) than the level of US $ 25194.42 million (Rs. 123873.66 crore) during February, 2012. Cumulative value of exports for the period April-February 2012 -13 was US $ 265946.37 million (Rs 1446626.70 crore) as against US $ 277124.56 million (Rs 1320835.99 crore) registering a negative growth of 4.03 per cent in Dollar terms and growth of 9.52 per cent in Rupee terms over the same period last year."
And for a change, imports have not grown faster than exports. They grew at a rate of around 2.65%, which is lesser than the 4.2% growth in exports as said above. This is just a monthly data, but a heartening one, as it indicates that the deficit would have grown smaller.
However, the overall deficit till now, for the year, is not very encouraging. The year has been bad. The deficit has widened to around 182 billion USD, against around 169 billion USD for April-Feb period last year.
I am predicting that we would end the year with a merchandise trade deficit of around 200 billion USD. This is a 'huge' sum to have as deficit, if you are not US of A. Thanks to the flows through services and capital account, we are somehow sustaining, but there is a need to take a hard look at what could be done about this.
That brings me to the discussions on Foreign Trade Policy supplement, which is due within next couple of weeks (around a month after Budget). And that would be the topic of my next post tomorrow.