Rogue rupee pockets export growth
Analysts attribute it to a sharp appreciation of the rupee that dents price competitiveness of Indian products in the world market.
By Agencies |
NEW DELHI: India's growth in the value of its exports slowed to 18.5 percent in July, the government said on Monday, suggesting the rupee's appreciation in recent months was beginning to hurt exporters.
Exports totaled $12.4 billion in July compared with $10.5 billion in the same month a year earlier, the commerce ministry said in a provisional update. Exports growth averaged 18.2 per cent between April and July, the first four months of the current fiscal year.
Both the monthly and year-to-date growth is off the pace of the 25 per cent increase in exports seen in the fiscal year ended March 2007, and slower than the 28 per cent growth target the government has set for this fiscal year.
The ministry's update did not elaborate on factors behind the slowdown, but analysts attributed it to a sharp appreciation of the rupee that dents price competitiveness of Indian products in the world market.
``We are beginning to see the impact of a stronger rupee,'' said Ram Upendra Das, a New Delhi based economist.
The rupee rose nearly 7 per cent against the US dollar during the April-June quarter and is hovering around a nine-year high. The higher rupee also reduces the foreign exchange earnings of exporters since most export earnings are denominated in dollars.
Monday's data showed imports grew faster than exports and rose to $17.5 billion in July, up 20.4 per cent from a year ago. As a result, the country's trade deficit widened further.
The trade figures do not include export and import of services, such as the outsourcing jobs done by India's information technology companies.
India's fiscal year runs April to March.
Exports totaled $12.4 billion in July compared with $10.5 billion in the same month a year earlier, the commerce ministry said in a provisional update. Exports growth averaged 18.2 per cent between April and July, the first four months of the current fiscal year.
Both the monthly and year-to-date growth is off the pace of the 25 per cent increase in exports seen in the fiscal year ended March 2007, and slower than the 28 per cent growth target the government has set for this fiscal year.
The ministry's update did not elaborate on factors behind the slowdown, but analysts attributed it to a sharp appreciation of the rupee that dents price competitiveness of Indian products in the world market.
``We are beginning to see the impact of a stronger rupee,'' said Ram Upendra Das, a New Delhi based economist.
The rupee rose nearly 7 per cent against the US dollar during the April-June quarter and is hovering around a nine-year high. The higher rupee also reduces the foreign exchange earnings of exporters since most export earnings are denominated in dollars.
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Monday's data showed imports grew faster than exports and rose to $17.5 billion in July, up 20.4 per cent from a year ago. As a result, the country's trade deficit widened further.
The trade figures do not include export and import of services, such as the outsourcing jobs done by India's information technology companies.
India's fiscal year runs April to March.
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