Indian November imports grow faster than exports

NEW DELHI: Indian imports grew faster than exports in November, data showed on Tuesday, and analysts expect the trade deficit could widen further on a mix of record oil prices, a fast-growing economy and a strong rupee.

Exports in November rose 26.8 percent from a year earlier to $12.4 billion in November, while imports rose an annual 29.3 percent to $19.8 billion, government data showed on Tuesday. That left a trade deficit of $7.4 billion for November, larger than $5.5 billion a year earlier.

The rupee rose 12.3 percent against the dollar last year, denting exporters’ competitiveness in foreign markets but offering some cushion against high oil prices.

“There could be some moderation in export growth in the coming months. The annual export target is difficult to meet,” said DK Joshi, principal economist at rating agency Crisil.

Last April, the government set an export target of $160 billion for the fiscal year ending in March 2008. In December, Commerce Secretary GK Pillai said exports were likely to be $140 billion. Tuesday’s data showed exports of $98.4 billion for the eight months ended November, up 22.1 percent from a year earlier.

High oil prices were a threat to domestic inflation, especially if the rupee’s rise stalled, Joshi said. However, he also said a 10.2 percent annual rise in the oil import bill to $43.3 billion for April to November was ‘not a concern’.

India’s trade deficit widened to $52.8 billion in the first eight months of 2007/08, up from $38.5 billion a year earlier, boosted mainly by non-oil imports, the data showed.

The Indian economy has grown at an average of 8.6 percent over the last four fiscal years, and is expected to grow at a similar rate in 2007/08, boosting demand for capital goods both from domestic and overseas markets. “Non-oil imports are reflective of a strong economic growth,” Joshi said. reuters