India had $ 295.6 billion foreign exchange reserves in Dec 2012

Indian foreign exchange reserves witnessed marginal rise.
Indian foreign exchange reserves witnessed marginal rise.

The foreign exchange reserves of India stood at US $ 295.6 billion in December 2012.

New Delhi, Feb 27/Nationalturk – There has been a marginal increase in Indian foreign exchange reserves by the end of last year and the foreign exchange reserves stood at US $ 295.6 billion in December 2012.

“By end of December 2012, India’s foreign exchange reserves stood at US $ 295.6 billion. It indicated a marginal increase of US $ 1.2 billion from US $ 294.4 billion in March, 2012,” revealed the Economic Survey Report, released by Indian Finance Minister today.

The India’s foreign exchange reserves comprise foreign currency assets (FCA), gold, Special Drawing Rights (SDRs) and Reserve Tranche Position (RTP) in the International Monetary Fund (IMF). The level of foreign exchange reserves is largely the outcome of the Reserve Bank of India (RBI) intervention in the foreign exchange market to smoothen exchange rate volatility and valuation changes due to movement of the US dollar against other major currencies of the world.

Significant market diversification in India’s trade

The Economic Survey said there was significant market diversification in India’s trade.

“India’s exports to Europe and America have declined to 18.7 per cent and 19.5 percent respectively in 2012-13 from 25.9 per cent and 24.7 per cent in 2000-01,” it said.

It further said the exports to Asia and Africa rose to 50.4 per cent and 9.6 per cent respectively from 37.4 per cent and 5.3 per cent respectively during the same period.

“There was a noticeable rise in the share of exports to West Asia –GCC (Gulf Cooperation Council) countries from 14.9 percent in 2011-12 to 17.7 percent in 2012-13 (April- November),” said the Survey adding a lot more is needs to be done.

The Survey also noted the impact of exchange rate changes on export growth. “While export growth in dollar terms was negative at – 4.9 in 2012-13 (April-January), it was positive in rupee terms at 9.1 per cent. Though, here too, there was a deceleration from the 28.3 per cent in 2011-12 (full year)”.

“The trade deficit of USD 167.2 billion for 2012-13 (April-January) was 7.9 per cent higher than the USD 154.9 billion during the same period in 2011-12,” the Survey said and attributed it to moderate export growth and high import growth, particularly in petroleum, oil and lubricants (POL) products. Demand contraction due to global economic conditions impacted India and export suffered.

After touching the high point of 56.5 per cent growth in July 2011, Survey said India’s export growth started decorating with a sudden fall to single digits in November 2011 and then to negative territory in March 2012. “Monthly export growth rates in 2012-13 (April- December) were negative except in April 2012”. The Survey further disclosed that India’s exports to EU and China have been more negative during the recent slowdown then in 2009-10, while the performance to USA has been better for most of the sectors except gems and jewellery.

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Faiz Ahmad / NationalTurk China News


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