Double digit exports growth a good sign for economy: FIEO

The third consecutive double digit growth in exports in September is a good sign for Indian economy and will further give a fillip to export growth in the second half, chief of the apex exporters body said Wednesday.

Reacting to the trade data for the month of September, 2013 showing over 11 percent growth in exports, M Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO) said, "the third consecutive double digit growth in exports augur well for Indian economy and strengthen our forecast that exports will cross the target of USD 325 billion fixed for current financial year as exports may clock even better result in the second half of the current fiscal touching USD 350 billion for the fiscal."

According to data released by the commerce ministry, country' exports rose by 11.15 percent to USD 27.68 billion in September while imports dipped by 18 percent, helping to narrow trade deficit to a two-and-a-half-year low, government data showed Wednesday. Imports contracted by 18.10 percent to USD 34.44 billion in September, leaving a monthly trade deficit of USD 6.76 billion. This is the lowest trade deficit since March 2011.

Trade deficit was recorded at USD 10.9 billion in August and USD 12.27 billion in the previous month.

Ahmed said that all sectors of exports are doing well ranging from marine, agro, garments, textiles, leather, carpets to new emerging sectors such as pharmaceuticals, specially chemicals and agro chemicals.

Engineering exports are also back on track and the only concern is gems and jewellery sector, said Ahmed, but with increasing availability of the gold for the sector, gold and jewellery exports will also pick up in the second half.

The decline in oil imports by 5.9 percent and non-oil imports by 24 percent primarily due to drop in gold and silver imports and non-essential imports has helped to manage the trade deficit which has sharply declined from USD 17 billion in September 2012 to USD 6.7 billion, a whopping decline of 153percent, in September, 2013.

FIEO Chief said that the trade deficit is likely to come down to below USD 150 billion for the current fiscal which will help the government to keep the current account deficit within USD 70 billion.

Ahmed said that for sustaining exports, manufacturing needs to pick up and, therefore, availability of credit and cost of credit would be the key.

He reiterated his demand for bringing exports under the priority sector lending for increasing access to credit, particularly for MSMEs sector.