Export growth has been slowing down steadily. Data for the current fiscal year upto end-January show that export growth has been a meagre 2.37 per cent over the period. Exports during January 1998 are valued at $26.29 billion, 7.47 per cent lower than exports in January last year. Disaggregated data indicate that, at least till end-November, the reason for the decline was due to the fall in exports of agricultural and allied products. Exports of manufactured goods, including textiles, were doing comparatively well. Even exports of gems and jewellery, an industry deep in the doldrums, was posting a rate of growth of 3.3 per cent over the period. This would seem to indicate that the sluggish growth in exports so far has little to do with the SE Asian crisis, although reports indicate a sharp pick-up in exports from countries such as Thailand, which will in due course prove to be a major threat . Add to that the fact that a substantial amount of Indian textile exports go to the region, and there is littledoubt that the crisis will, sooner or later, hurt Indian exports. Imports, on the other hand, are lower because of the sharp fall in oil prices. Non-oil imports have been quite buoyant, with growth of 13.72 per cent during the April-January period. Lower oil prices have helped keep the trade deficit at $5.57 billion--if oil imports had remained at the same level as last year, this deficit would have been a billion dollars higher. It need scarcely be mentioned that the two immediate reasons for the SE Asian currency crisis was slower export growth coupled with an overvaluation of their currencies. In this context, the planning commission's call for a lower rupee makes sense--a slow and steady depreciation of the rupee may be the only way to ensure export growth in an environment of slower world growth.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
