Trade snippets

India’s merchandise trade grew at a faster-than-expected pace in June, belying fears of depressed demand in buyer countries and possible slowdown at home. June exports rose 46.4% to $29.2 billion while imports increased 42.4% to $36.9 billion over the year-ago period, data released by the government on Friday showed. Cumulatively, firstquarter exports rose 45.7% to $79 billion and imports 36% to $110.6 billion. In May, exports went up by a huge 56.93% at $25.94 billion from $16.53 billion in May 2010. The surprisingly robust trade performance has baffled experts and policymakers, who say they’re not sure if it would be sustained throughout the year. Fluid Global Markets Pose a Challenge Commerce Secretary Rahul Khullar said the global market—be it the US, EU, China or Japan—was very fluid. There is a risk of the Greece and Portugal contagion spreading to rest of Europe while Japan is still engaged in rebuilding and China is slowing down its economy to check runaway inflation. News from the US was less than cheerful as the wrangling on debt was still on, and till that was sorted out, one could not expect a stimulus injection for revival, Khullar said. Despite these odds, India’s exports have maintained a high double-digit growth on a robust base of 36.5% rise in 2010-11. Experts are at a loss to explain this performance. The rise in exports has helped reduce pressure on the country’s current account deficit through a manageable trade deficit, which stood at $31.6 billion for the first quarter. Khullar said this was manageable as it averaged at about $10 billion a month. The surge in imports is adding to the confusion over the macro fundamentals of the economy as it is against all evidence of domestic slowdown, namely, the deceleration in industrial growth, which is stuck in low single digits. Machinery imports rose 49% to $9 billion in the first quarter while transport equipment was up 34% to $2.5 billion. The biggest surge was in imports of gold and silver, which were up 200% to $17.7 billion. Oil imports increased 18% to $30.5 billion. Khullar said the current domestic economic scenario has not started rubbing off on the import figures as the private sector’s mood today starts getting reflected after a gap of 2-3 months. Increase in exports has been across sectors with engineering, petroleum products, gems & jewellery, coal and minerals, readymade garments and electronics taking the lead.