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Monday, December 03, 2007

India's Exports Increase at Fastest Pace in 15 Months

From Bloomberg this morning:

India's exports grew in October at the fastest pace in 15 months as companies filled old orders and used hedging to cope with the impact of rupee appreciation.

Shipments of manufactured goods including gems and petroleum products rose 35.7 percent from a year earlier to $13.3 billion, following a 19.2 percent gain in September, the commerce ministry said today in New Delhi. Imports increased 24.3 percent to $20.8 billion, widening the trade deficit to $7.5 billion from $7 billion a year earlier.

Rising exports may help Prime Minister Manmohan Singh's government achieve its target of boosting India's annual economic expansion to more than 9 percent in the next five years. Singh needs faster growth to generate more employment and reduce poverty in a nation of 1.1 billion people where more than half the population lives on less than $2 a day.

``Companies are now carrying out orders booked earlier, as exporters don't want to lose the market forever,'' said Ganesh Kumar Gupta, president of the Federation of Indian Export Organizations in New Delhi. ``The rupee appreciation is hurting the profitability of the exporters.''

India's currency has gained more than 11 percent this year against the dollar, eroding the value of the merchandise exports which make up about 15 percent of Asia's third-largest economy.

Exports in the seven months ended Oct. 31 rose 21 percent to $$85.6 billion, while imports rose 25.31 percent to $130 billion in the period, widening the trade deficit to $44.4 billion from $32.9 billion a year earlier.

Stronger Currency

The local currency gained to a near nine-year high against the dollar this year and is the second-best performer in Asia, hurting the profits of exporters. The rupee gained as overseas investors, enticed by record economic growth, purchased shares.

Gems and jewelry exports rose 48 percent to $2.16 billion in October from $1.4 billion in the same month a year ago, according to the Gem & Jewelry Export Promotion Council.

``Rupee appreciation definitely has an impact on the export earnings, but we have managed to counter the impact as all our transactions are covered by hedging,'' said Bipin Mehta, chief financial officer of Rajesh Exports Ltd., India's largest producer and exporter of gold jewelry by market value.

Non-oil imports in October rose 28.8 percent to $14.65 billion, while oil imports gained 14.6 percent to $6.12 billion, today's report said.

1 comment:

Multisubj Yb TruthSeeker said...

So India is shining, glowing! Okay.

IndianEconomyYb.BlogSpot.Com