Export growth continued to be meagre as shipments in December last year increased only by 6.7 per cent year-on-year to $25 billion owing to weak demand in major markets, such as the US and Europe.
However, this performance was slightly better than in November last year, when export growth was just 3.9 per cent.
Month-on-month export growth this fiscal had shown a slowdown till November from a high of 82 per cent in July.
Trade deficit
Meanwhile, imports during December last year rose 19.8 per cent to $37.8 billion, resulting in a trade deficit (gap between exports and imports) to $12.8 billion, according to data released by the Commerce and Industry Ministry on Wednesday.
Exports during the first three quarters this fiscal (April-December 2011) reached $217.7 billion, registering an impressive growth of 25.8 per cent.
Imports for April-December last year jumped 30.4 per cent to $350.9 billion. This high level of imports has widened the trade deficit to $133.3 billion from $96.2 billion during April-December 2010. Oil imports during December last year rose 11.2 per cent to $10.3 billion, while commodity imports during April-December last year were $105.6 billion, up 40.4 per cent from the same period previous year.
Non-oil imports, including capital goods, stood at $27.5 billion, a rise of 23.4 per cent, while imports of these items during April-December last year were $245.4 billion, up 26.5 per cent.
Difficult times
Mr M. Rafeeque Ahmed, President, Federation of Indian Export Organisations, said widening trade deficit was a cause of concern as it was likely to hike import bills in rupee, which, in turn, could have an adverse effect on inflation.
Pointing to the difficult times ahead, he said the cost of credit needs to be brought down so that both manufacturing and exports become competitive.
The Commerce Secretary, Dr Rahul Khullar, had said earlier this month that exports during 2011-12 would touch the target of $300 billion, while imports were likely to be worth $460 billion taking the trade deficit to (a record high of) $160 billion.