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Exports feel the pressure

New Delhi, Jan. 10: Export growth slackened to a six-month low of 3.49 per cent in December to $26.35 billion because of a decline in the shipment of petroleum goods.

“It is only one product group which has contributed to (slower growth in exports) and that is petroleum products. There has been an unplanned maintenance shutdown in one of our largest exporters of the country — Reliance Industries,” commerce secretary S. R. Rao said.

Imports fell to $36.4 billion because of lower gold and silver shipments. Trade deficit widened to $10.14 billion in December compared with $9.22 billion in November.

Gold and silver imports declined 68.8 per cent to $1.77 billion in December after the government imposed restrictions to contain the current account deficit.

“We are not happy with a modest growth of 3.49 per cent in exports. All out efforts are required to keep export growth in double digits,” said M. Rafeeque Ahmed, president of the Federation of Indian Export Organisations.

Sanjay Budhia, chairman of CII export committee, said, “We hope the government will help exporters by including more products and countries in the Focus Product and Focus Market schemes. Also, we need to relook at the duty drawback rates.”

Aditi Nayar, senior economist at Icra, said the deceleration in exports growth in November-December following the double-digit expansion in the previous four months poses a note of caution, particularly given the adverse base effect for the ongoing quarter.

During April-December, exports aggregated $230.3 billion and imports $340.3 billion, while the trade deficit was about $110 billion.

However, Rao expressed confidence that India would achieve the export target of USD 325 billion for the current financial year. “We are well on the track of the exports target,” he said.

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