India's exports grew by 23 per cent to US$155.5 billion in the fiscal year ended March, missing an annual target, and analysts said shipments would face headwinds in the current year due to a possible global slowdown.
Data released by the government on Thursday showed exports grew a robust 26.6 per cent in March to US$16.28 billion, up from February's US$14.24 billion, but it was not enough for India to attain the annual target of US$160 billion.
Firm oil prices and robust domestic demand boosted imports by 27 per cent to US$235.91 billion in 2007-2008, and widened the trade deficit for the fiscal year by 35.5 per cent to US$80.4 billion, from US$59.32 billion the year before.
'This trend shows that the rupee appreciation has not really affected the export performance and missing the target is a minor blip which one can ignore,' said T K Bhaumik, chief economist at Reliance Industries Ltd. 'But 2008-2009 would be the most difficult year for India's exports because of the global slowdown and exports will have to face the challenge of falling global demand.'
Mr Bhaumik said the trade gap could widen to US$100 billion in 2008-2009 but that should not be a cause for worry as India had comfortable foreign exchange reserves.
Exports account for nearly 15 per cent of India's gross domestic product.
The World Trade Organization said last week global trade growth would slow to a six-year low in 2008 although financial market turbulence and slowdowns in some developed economies have so far had little effect.
Last year, the Indian government raised tax refund rates and offered interest subsidies on bank loans to ease the pain of exporters hit by a rise of 12 per cent in the value of the local currency against the dollar.
Imports rose 35.24 per cent to US$23.17 billion in March while non-oil imports, a key gauge of domestic economic activity, were up 18.7 per cent to US$14.5 billion. Non-oil imports in 2007-2008 were 23.4 per cent to US$158.9 billion while oil imports during the fiscal year were up 35.3 per cent at US$77 billion from a year ago.
India hopes to grab a 5 per cent share of global trade by 2020.
Data released by the government on Thursday showed exports grew a robust 26.6 per cent in March to US$16.28 billion, up from February's US$14.24 billion, but it was not enough for India to attain the annual target of US$160 billion.
Firm oil prices and robust domestic demand boosted imports by 27 per cent to US$235.91 billion in 2007-2008, and widened the trade deficit for the fiscal year by 35.5 per cent to US$80.4 billion, from US$59.32 billion the year before.
'This trend shows that the rupee appreciation has not really affected the export performance and missing the target is a minor blip which one can ignore,' said T K Bhaumik, chief economist at Reliance Industries Ltd. 'But 2008-2009 would be the most difficult year for India's exports because of the global slowdown and exports will have to face the challenge of falling global demand.'
Mr Bhaumik said the trade gap could widen to US$100 billion in 2008-2009 but that should not be a cause for worry as India had comfortable foreign exchange reserves.
Exports account for nearly 15 per cent of India's gross domestic product.
The World Trade Organization said last week global trade growth would slow to a six-year low in 2008 although financial market turbulence and slowdowns in some developed economies have so far had little effect.
Last year, the Indian government raised tax refund rates and offered interest subsidies on bank loans to ease the pain of exporters hit by a rise of 12 per cent in the value of the local currency against the dollar.
Imports rose 35.24 per cent to US$23.17 billion in March while non-oil imports, a key gauge of domestic economic activity, were up 18.7 per cent to US$14.5 billion. Non-oil imports in 2007-2008 were 23.4 per cent to US$158.9 billion while oil imports during the fiscal year were up 35.3 per cent at US$77 billion from a year ago.
India hopes to grab a 5 per cent share of global trade by 2020.
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