Monday, Jun 02, 2003
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By Sushma Ramachandran
The scenario has been completely reversed in April which saw a phenomenal rise of nearly 40 per cent in imports. As a result, the trade deficit has spiralled from $212.25 million in the same month last year to $1.52 billion this year. Exports, on the other hand, show a healthy rise of 8.7 per cent despite being on a high base as April last year had recorded a 28 per cent rise in terms of dollar. The spurt in imports is partly accounted for by the rise in international oil prices which led to an over 38 per cent growth from $1.24 billion to $1.72 billion this year. Simultaneously, however, non-oil imports have risen at an even higher rate of nearly 40 per cent, growing from $2.96 billion to $4.14 billion in April 2003. The latest data on foreign trade released by the Commerce Ministry today shows that with the rupee having appreciated against the dollar, the level of rise in imports during April this year is 35.04 per cent in rupee terms and 39.44 per cent in dollar terms. With this level of increase in imports during the first month of the current fiscal, there is bound to be some concern over the trade gap in the coming months. Fortunately, the cost of oil imports has already moderated since April which felt the impact of rising world prices in the run-up to the U.S.-led war on Iraq. After the war was actually launched, international prices stabilised at lower levels and are continued to show signs of softening. In fact the Organisation of Petroleum Exporting Countries (OPEC) has been concerned about the continued dip in world markets and has been considering ways to ensure that prices do not fall beyond the band of $22 to 28 per barrel. At the same time, non-oil imports have also risen by a phenomenal level of nearly 40 per cent, which could indicate better performance on the industrial front. As far as commodity imports are concerned, edible oils has so far formed a big chunk of total imports to meet domestic demand in the wake of poor production levels within the country. Since the import growth data released today is based on provisional figures, the disaggregated data must be awaited to take a closer look at the reasons for this sudden spurt. On the export front, the 8.7 per cent rise during April 2003 augurs well especially since it has been achieved despite the negative impact of SARS and the Iraq war. With international demand falling as a result of these global developments, even this level of growth is commendable. In some sectors, exporters have already been claiming that the SARS effect has brought buyers into India, diverting business normally sourced in China or South-East Asia. The Commerce and Industry Minister, Arun Jaitley, has also gone on record saying that SARS, despite being a dreaded disease, has provided some silver lining to exporters who are getting more orders which would normally have been sought from SARS-affected countries. To what extent this positive impact will continue can only be judged in the coming months, Commerce Ministry officials say.
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