NEW DELHI India's exports of gems, jewelry and other manufactured products expanded at the fastest pace in seven months in April, spurring industrial growth.
Exports rose 27 percent to $8.3 billion in April from a year ago, the fastest since October 2005, compared with a 21 percent gain in the previous month, the Commerce and Industry Ministry said in a statement Friday. The ministry did not give any explanation for the increase in exports.
India, Asia's fourth-biggest economy, needs faster exports to increase industrial growth to the 10 percent pace that Prime Minister Manmohan Singh's government says is required to spur economic expansion to more than 8 percent each year. Exports make up about a tenth of India's $775 billion economy. China's economy grew 9.9 percent in 2005, overtaking Britain as the world's fourth largest, powered by record $762 billion exports.
"Our export growth target for this year can be met," said Kamal Nath, India's commerce and industry minister. "It is satisfying to see the growth rate maintained in the last two years is not only being maintained but accelerated."
Exports rose 25 percent to $101 billion in the year ended March 31, 2006, exceeding the target of $92 billion for the year. The government is aiming to lift overseas sales to $165 billion by March 31, 2010. That would help India gain a 1 percent share of global merchandise trade from the current 0.8 percent.
India expects the economy to grow between 7.5 percent and 8 percent in the year ending March 31, following an 8.1 percent gain in the previous year. The government is aiming for 10 percent economic growth in the next two to three years. India's industry accelerated 7.7 percent in March.
India's imports rose 20.5 percent to $12.5 billion in April, widening the trade deficit to $4.21 billion during the month from $3.85 billion a year ago, the ministry said. Non-oil imports in April rose 14.5 percent to $8.4 billion, while oil imports rose 34.6 percent to $4.15 billion.
India also needs to lift exports to help narrow the gap in the trade account after higher crude oil prices and rising imports fueled by economic expansion widened the deficit.
Cigarette sales lift ITC
ITC, which sells seven of every 10 cigarettes in India, had a 36 percent gain in profit before a one-time expense, as demand for its tobacco and agriculture products increased.
Net income excluding the one-time cost rose to 5.67 billion rupees, or $124 million, from 4.17 billion rupees a year ago, the Calcutta company said in a statement Friday. Revenue climbed 28 percent to 28.6 billion rupees.
ITC, which is 32 percent owned by British American Tobacco, sells cigarettes through more than two million outlets. The company is set to take advantage of restrictions placed on overseas tobacco companies, including limits on local manufacturing, at a time when higher economic growth is spurring Indian smokers to shift to costlier brands.
"ITC will be able to maintain its growth momentum," said Dipak Acharya, a fund manager at BOB Asset Management in Mumbai. "There is no threat of competition in cigarettes. In hotels there is undersupply of rooms, and in paper, demand is outstripping supply."
Net income after the one-time expense in the three months to March 31 declined 26 percent to 5.68 billion rupees. The year- earlier figure includes a one-time gain. Sales increased 28 percent to 27.84 billion rupees.
The company's cigarette sales increased 15 percent, hotel revenue gained 45 percent, paper sales rose 15.6 percent and agriculture business surged 56 percent in the quarter.
India restricts local production by overseas companies, including Altria Group's Philip Morris International, forcing them to import their best- selling brands, including Marlboro.
The Health Ministry's ban on tobacco advertising in 2004 and its proposal last August to ban the display and use of tobacco in movies also makes it difficult to promote new brands.
Low cigarette consumption in a country where people prefer to chew tobacco or smoke bidis - tobacco hand-rolled in leaves of the tendu plant - offers companies such as ITC an opportunity.
Set up in 1910, ITC has added new businesses such as foods, matches, incense sticks, apparel, deodorants, greeting cards and rural retail chains in the past six years, reducing dependence on tobacco. ITC's revenue from its 60 hotels rose 45 percent to 2.63 billion rupees. Profit before tax and one-time gains or costs gained 72 percent to 978 million rupees.
"The sales growth in hotels shows there is lot of buoyancy and ITC's premium position reflects on the earnings," said Abhijeet Kundu, an analyst at Prabhudas Lilladher Securities in Mumbai.
NEW DELHI India's exports of gems, jewelry and other manufactured products expanded at the fastest pace in seven months in April, spurring industrial growth.
Exports rose 27 percent to $8.3 billion in April from a year ago, the fastest since October 2005, compared with a 21 percent gain in the previous month, the Commerce and Industry Ministry said in a statement Friday. The ministry did not give any explanation for the increase in exports.
India, Asia's fourth-biggest economy, needs faster exports to increase industrial growth to the 10 percent pace that Prime Minister Manmohan Singh's government says is required to spur economic expansion to more than 8 percent each year. Exports make up about a tenth of India's $775 billion economy. China's economy grew 9.9 percent in 2005, overtaking Britain as the world's fourth largest, powered by record $762 billion exports.
"Our export growth target for this year can be met," said Kamal Nath, India's commerce and industry minister. "It is satisfying to see the growth rate maintained in the last two years is not only being maintained but accelerated."
Exports rose 25 percent to $101 billion in the year ended March 31, 2006, exceeding the target of $92 billion for the year. The government is aiming to lift overseas sales to $165 billion by March 31, 2010. That would help India gain a 1 percent share of global merchandise trade from the current 0.8 percent.
India expects the economy to grow between 7.5 percent and 8 percent in the year ending March 31, following an 8.1 percent gain in the previous year. The government is aiming for 10 percent economic growth in the next two to three years. India's industry accelerated 7.7 percent in March.
India's imports rose 20.5 percent to $12.5 billion in April, widening the trade deficit to $4.21 billion during the month from $3.85 billion a year ago, the ministry said. Non-oil imports in April rose 14.5 percent to $8.4 billion, while oil imports rose 34.6 percent to $4.15 billion.
India also needs to lift exports to help narrow the gap in the trade account after higher crude oil prices and rising imports fueled by economic expansion widened the deficit.
Cigarette sales lift ITC
ITC, which sells seven of every 10 cigarettes in India, had a 36 percent gain in profit before a one-time expense, as demand for its tobacco and agriculture products increased.
Net income excluding the one-time cost rose to 5.67 billion rupees, or $124 million, from 4.17 billion rupees a year ago, the Calcutta company said in a statement Friday. Revenue climbed 28 percent to 28.6 billion rupees.
ITC, which is 32 percent owned by British American Tobacco, sells cigarettes through more than two million outlets. The company is set to take advantage of restrictions placed on overseas tobacco companies, including limits on local manufacturing, at a time when higher economic growth is spurring Indian smokers to shift to costlier brands.
"ITC will be able to maintain its growth momentum," said Dipak Acharya, a fund manager at BOB Asset Management in Mumbai. "There is no threat of competition in cigarettes. In hotels there is undersupply of rooms, and in paper, demand is outstripping supply."
Net income after the one-time expense in the three months to March 31 declined 26 percent to 5.68 billion rupees. The year- earlier figure includes a one-time gain. Sales increased 28 percent to 27.84 billion rupees.
The company's cigarette sales increased 15 percent, hotel revenue gained 45 percent, paper sales rose 15.6 percent and agriculture business surged 56 percent in the quarter.
India restricts local production by overseas companies, including Altria Group's Philip Morris International, forcing them to import their best- selling brands, including Marlboro.
The Health Ministry's ban on tobacco advertising in 2004 and its proposal last August to ban the display and use of tobacco in movies also makes it difficult to promote new brands.
Low cigarette consumption in a country where people prefer to chew tobacco or smoke bidis - tobacco hand-rolled in leaves of the tendu plant - offers companies such as ITC an opportunity.
Set up in 1910, ITC has added new businesses such as foods, matches, incense sticks, apparel, deodorants, greeting cards and rural retail chains in the past six years, reducing dependence on tobacco. ITC's revenue from its 60 hotels rose 45 percent to 2.63 billion rupees. Profit before tax and one-time gains or costs gained 72 percent to 978 million rupees.
"The sales growth in hotels shows there is lot of buoyancy and ITC's premium position reflects on the earnings," said Abhijeet Kundu, an analyst at Prabhudas Lilladher Securities in Mumbai.
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