Rupee appreciation dents export growth sharply in June

RELATED NEWS Rupee closes higher, bonds lower Rupee likely to range between Rs 40.43-40.60 Re rise will lower material cost, improve margins: BHEL Rising rupee brings gains for consumer durable sector Re may play spoilsport going forward: Ram Kolluri Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

New Delhi, Aug. 1

With rupee appreciation against dollar unrelenting, India's first quarter export growth in the current fiscal decelerated to 7 per cent in rupee terms and in the month of June 2007, the latest available data, export growth was less than 1 per cent.

In dollar terms, the export growth during April-June 2007 was 18 per cent against the trend rate of above 20 per cent witnessed in the recent past.

Import Growth

Provisional figures of trade data show that with exports growth slowing down and import growth maintaining the high growth rate of 34 per cent, the trade deficit for the first quarter zoomed to $20.6 billion, against $11.8 billion in the corresponding period of 2006-07.

Officials in the Commerce Ministry told Business Line here that the high trade deficit on the back of a hefty import growth was not a matter of serious concern as the imported items broadly reflect intermediates, raw materials and o ther capital goods that help underpin the high industrial growth noticeable in the Indian economy in recent months.

They further said that the country's high forex reserves, hovering over $200 billion, would help meet high import growth. However, they did concede that the persistent rupee appreciation against US dollar has dampened export drive and exporters are getting exasperated by the lower value realisation for larger exports.

contd on page 2...