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Exports recover
After the fall (by 4 per cent) in 1998-99, this year's 10-per cent export growth target attracted much scepticism. But exports this October were up 22 per cent over October 1998; and this boosted the export-growth rate for April-October to 10 per cent. Exports during the first seven months at $20.7 billion were up by $1,891 million; of this, $562 million or close to 30 per cent was in October, the turnaround month. The 10-per cent growth rate may be sustained, if not improved upon, in the rest of this fiscal. The rupee remains stable, but low domestic inflation helps. East Asia's revival and the surge in West Asia's oil revenues mean an improved market for Indian exports. Besides, industrial growth fuelled by domestic demand has raised capacity utilisation and cut average costs, making exports competitive at the margin. Better domestic sales have also helped: export profits are tax-free; these are apportioned from total profits (on quantum basis) for tax-free treatment.On the flip side, India's foreign trade this year shows prolonged import stagnation. True, the import bill for April-October at $26.5 billion saw a rise by $ 1,858 million; but this increase came mainly from a rise in the oil import bill to $5.27 billion, up from $3.47 billion (reflecting the impact of oil import price spurt this fiscal). Non-oil imports showed little change at $21.2 billion. Actually, net of imports of edible oil and of wheat, there was a fall in imports (of intermediates, plant and machinery) by industry. Perhaps the unit value of imports of intermediates (a result of dumping by foreign suppliers) fell. But there is little evidence of accelerating investment in new industrial capacity, essential to sustain the export recovery in the coming years. Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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