Fieo hails July export jump, but warns of slowdown ahead

MUMBAI: The umbrella body of exports Fieo today hailed the robust export numbers for July and cautioned that the industry may not be able to sustain high growth in the face of global uncertainties and the rising interest rates in the domestic context.

Earlier in the day, the Commerce Ministry said July exports zoomed 81.79 percent to $ 29.3 bn buoyed by the engineering goods, gems & jewellery, ready-made garments, cotton yarn fabric, chemicals, electronics sectors.

"The growth of 81 percent in exports, on a not so low base of July 2010, is unheard of in recent history of Indian exports," Federation of Indian Export Organisations (Fieo) President Ramu S Deora said in a statement issued here.

However, Deora cautioned about the challenges facing the exporters in view of the recent global developments which cannot be ignored as they will have serious bearings on the exports in the forthcoming two quarters.

"The problems on the domestic front, with hike in interest rates for exports and uncertainty over continuance of the DEPB scheme, have further accentuated the problem," Deora said.

He also attributed the rosy numbers in the background of numerous challenges in the US and Europe as a measure of entrepreneurial skills of exporters coupled with their diversifications both at the product and country level, which is supported by the government through market-linked incentives.

Engineering, petroleum products and gems and jewelery exports were worth $ 8.7 bn, $ 4.6 bn and $ 3.5 bn, respectively, in July.

Imports too jumped by 51.5 percent to $ 40.4 bn in July against 26.6 bn, leaving a trade deficit of $ 11 bn. Oil imports were valued at $ 11.44 bn, an increase of 37.02 per cent over the same period last year. Non-oil imports also grew by 58.12 per cent to $ 28.98 bn from $ 18.32 bn 7.8 in July 2010.

The export figures of the last four months of the current fiscal show that we are adding around $ 10 bn, resulting in $ 26-27 bn in exports every month, Deora noted.