Trade deficit rises to $115 b in April-Feb

New Delhi, April 1 The country's exports, continuing the downslide for
the fifth month in a row this fiscal, suffered a serious jolt with a
steep decline by 22 per cent at $11.9 billion in February 2009,
against $15.2 billion in the corresponding month last year.

With imports too plummeting by a huge 23.3 per cent at $16.8 billion,
($21.9 billion), India's foreign trade front groans under the
unenviable triple whammy of declining exports and imports with
cumulative massive trade deficit of $115 billion in the first 11
months of the current fiscal, against a trade deficit of $82.2 billion
for the whole of 2007-08.

Cumulative exports
In this depressing scenario, cumulative exports in the first 11 months
of 2008-09 have come to a grinding halt slowing down to 7.3 per cent
at $156.6 billion against $145.87 billion in the corresponding months
of 2007-08. But thanks to the depreciation of the Indian rupee
vis-À-vis the US dollar, in which a major portion of the export
receipts is received, the export growth in rupee terms has swollen
substantially to log a growth of 20.3 per cent.

Cumulatively, India's exports during April-February 2008-09 at $271.7
billion ($228 billion) registered 19.1 per cent growth in dollar terms
and 33.4 per cent growth in rupee terms at Rs 12,23,213 crore (Rs
9,17,179 crore).

March estimates
Official sources told Business Line here that quick estimates of March
2009 show that there would be at least 25 per cent dip as compared to
the corresponding month of 2008 when exports fetched $16.3 billion in
a single month.

Making due allowance to the high base of last March, the exports could
still be at best $12 billion or thereabouts, taking the overall export
receipts for the current fiscal at $168 billion, against the original
target of $200 billion and scaled-down target of $170 billion for
2008-09.

Outlook
Reacting to the steepest decline in exports in February 2009, the
Federation of Indian Export Organisations President, Mr A. Sakthivel,
said the combined decline in both exports and imports would impact the
manufacturing sector already reeling under slowdown. He, however,
hoped that the next fiscal would see a turnaround with likely
improvement in overseas markets.

However, Moody's Economy.com contends that "tough times for Indian
exporters will last for some time yet as giant economies such as the
US and Europe are still deep in recession".

While pointing out that the Government would continue to be under
pressure to support struggling export-oriented manufactures in the
coming months, it said that imports would also remain in negative
territory in the coming months, reflecting the still-subdued global
commodity prices coupled with a decline in domestic demand.

Import break-up
A break-up in import component shows that oil imports in February '09
at $4 billion were 47.5 per cent lower than such imports valued at
$7.7 billion in the corresponding month of '08, while cumulatively oil
imports at $89.7 billion was 26.8 per cent higher than $70.7 billion
in the corresponding period of '07.

Non-oil imports in Feb '09 at $12.7 billion was 10.2 per cent
lower$14.2 billion), reflecting the decline in the import of capital
goods and intermediates and raw materials for sustaining domestic
manufacturing activities.

Overall, non-oil imports at $182 billion were up by 15.6 per cent than
such imports valued at $157.4 billion in the 11 months of 2007-08.

http://www.thehindubusinessline.com/2009/04/02/stories/2009040252230500.htm