Despite galloping merchandise exports this fiscal, the current account deficit has been on an upward spiral on rising oil imports, whose price has been on the rise coupled with a falling rupee. Last year the CAD stood at 2.6% of the GDP and it is expected to be a tad more than that this fiscal
Mumbai: Terming the widening current account deficit (CAD) as a ‘major concern’, Reserve Bank of India deputy governor HR Khan on Tuesday called for special efforts to drive up exports so that this will not deteriorate further, reports PTI.
“We are a current account deficit country and this is a major concern,” Mr Khan told an Engineering Export Promotion Council gathering here late last evening.
“We are a balance of payments stressed country. We have to promote exports to see that this is not going out of hand,” he added.
Despite galloping merchandise exports this fiscal, the current account deficit has been on an upward spiral on rising oil imports, whose price has been on the rise coupled with a falling rupee. Last year the CAD stood at 2.6% of the gross domestic product (GDP) and it is expected to be a tad more than that this fiscal.
The commerce ministry reported a robust 36.3% rise in September exports while the import number rose 17.2% to $24.8 billion and $34.5 billion, respectively, leaving a trade deficit of $9.7 billion.
The government has set target of $300 billion from exports this fiscal.
During the first half (H1), exports grew by 52% to $160 billion from $105.2 billion in the same period last year, while imports expanded by 32.4% to $233.5 billion, leaving a trade gap of $73.4 billion for the half year.
Oil imports grew by 14.62% to $9.2 billion in September, while non-oil imports rose by 18.17% to $25.3 billion in the reporting.
During the April-September period, oil imports grew by 42.39% to $70.34 billion from $49.4 billion in the year-ago period. Non-oil imports were valued at $163.1 billion, an increase of 28.52% from $126.95 billion.
Mr Khan also termed the $318-billion forex reserves as ‘borrowed money’ kept for times of ‘extreme distress’.
Improving exports, he said, will allow the country a greater flexibility for its imports which will in turn give access to the best of goods and services.
On the trade payment issue with Iran, Mr Khan said, “to all those sanctions-compliant exports, we are trying to provide a rupee window. So some money in the rupee account will be available with two three domestic banks and it is going to be available shortly.”
Last December, the RBI had stopped oil payments in dollar payments to Iran due to sanctions by the US. Since then payments have been made over a lengthy period and so far no lasting solution has been worked out as yet.
“Around one-third of our exports go to advanced economies and buyers there are playing safe on account of the ongoing slowdown. RBI’s decision to extend the relaxation has a lot to do with that,” FIEO director general Ajay Sahai said
Mumbai: The Reserve Bank of India (RBI) on Tuesday extended the flexibility to exporters to repatriate their remittances up to a year, in the face of difficult business environment in world’s developed markets, reports PTI.
The RBI had in June 2008, relaxed the norms for repatriation of payments to be received by exporters of goods and services. It allowed up to one year, instead of six months earlier, for such remittances.
The liberalised norms will continue till 30 September 2012, RBI said in a notification.
“It has been decided to further extend by one year—from 1 October 2011 till 30 September 2012, the relaxation with respect to the period of realisation and repatriation to India, of the amount representing the full value of goods or software exported, from six months to 12 months from the date of export...” RBI said.
Exporters welcomed the move, stating it would help them in marketing their products and services.
“Buyers are more attracted if the credit period is longer,” Federation of Indian Export Organisations (FIEO) director general Ajay Sahai said.
He said the situation in major economies like the US and European Union is difficult.
“Around one-third of our exports go to advanced economies and buyers there are playing safe on account of the ongoing slowdown. RBI’s decision to extend the relaxation has a lot to do with that,” Mr Sahai said.
India’s merchandise exports aggregated $246 billion 11 and services, comprising mainly of IT and IT-enabled jobs shipped were valued at $131 billion in 2010-11.
COAI said the roaming arrangements have helped subscribers of operators who have not received 3G spectrum to enjoy high speed data services and also to meet the objectives of encouraging efficient spectrum utilisation and promoting broadband penetration to citizens
New Delhi: Under scrutiny for entering into illegal roaming agreement for third generation (3G) mobile services, Cellular Operators Association (COAI)—the lobby of GSM operators—on Tuesday said that any changes in it would deprive users of enjoying seamless high-speed data services, reports PTI.
In July this year, in an effort to reduce cost and offer pan-India 3G services, Vodafone, Bharti Airtel and Idea Cellular had entered into roaming agreement to serve their respective customers in circles in which they (operators) had failed to get 3G spectrum in the auction last year.
This would help operators offer 3G services to customers in circles where they cannot build their own 3G network as they do not have the licence.
Airtel, Aircel and RCom each owns 3G spectrum licence in 13 of the 22 telecom circles, while Vodafone has it in 10 circles and Idea and the Tatas in nine circles.
COAI has written to Telecom Regulatory Authority of India (TRAI) chairman JS Sarma saying prior to the 3G/BWA auctions, the Department of Telecom (DoT) had made it clear that “3G/BWA auction is for grant of spectrum and not for grant of licence to provide 3G or BWA services”.
Telecom regulator TRAI had sought information from service providers on their bilateral agreements for entering into 3G roaming pacts, to ensure that there is no violation of licence terms and conditions.
The DoT had also raised doubts over 3G roaming pacts of companies, which are not having 3G services on pan-India basis.
In an internal note, the DoT had clarified that a UASL (unified access service licence) licencee cannot offer 3G services, declare a tariff plan or acquire customers in a circle it hasn’t been allocated 3G spectrum in.
COAI has contended that a Unified Access Service (UAS) License is technology neutral access service license which allows the provision of all type of access services.
DoT in its note had said under the licence conditions, a licencee providing services has to have its own network. “At present, mandatory roaming or MVNOs are not part of the government’s telecom policy,” it had added.
The lobby said the roaming arrangements have helped subscribers of operators who have not received 3G spectrum to enjoy high speed data services and also to meet the objectives of encouraging efficient spectrum utilisation and promoting broadband penetration to citizens.
This has also resulted in additional revenue from the roaming subscriber and additional revenue share for the government as well.
COAI said any disallowance of intra-circle roaming will be substantial reversal of DoT’s stated position on the issue and a “reinterpretation of the fundamental nature of the technology neutral UASL structure”.
It has requested also TRAI to share a copy of its report which has been submitted to the DoT.